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Sourcing For Aroma Reed Diffusers – Real Lessons

It started out as just something I see around the house. They look elegant, releases an indulging fragrance, and supposedly all-natural too.

There’s just something about aroma reed diffusers that makes us immediately associate the presence of a spa when we see one.

The clear or frosted glass bottle makes the solution it contains look like some kind of “life potion”. And the reed sticks that stick out from the top further enhances the perception of an exotic and natural product.

More importantly, at up to $50 retail price a pop, I can imagine the margins that every player in the supply chain is pocketing…

… not least, the retailer.

These factors above led us to take a peek into the rabbit hole for ourselves.

Below are the details of what we went through in this learning experience. Hopefully, it can help you navigate through them if you are on the same road we were previously.

What Quality?

Now you might ask… so what is the quality we were looking for?

thinking about quality criteria

Well firstly, we had to take into account the retail price we want to sell this product for. Which is around the $50 mark.

Even though $50 seemed like a high price, there is a vibrant market for premium diffusers. They are not necessarily the affluent segment. This gap is the market where consumers are willing to pay for what something is worth.

If a consumer is to spend $50 on an aroma reed diffuser, it must be some good stuff because many companies are selling theirs at less than $20.

So the only way we feel that someone would spend $50 on a bottle and feel that he/she received great value out of it, the product must meet 4 criteria:

  1. The scent must still be strong enough to easily fill a regular room on first use
  2. The scent must continue to be diffused effectively after 4 to 6 weeks with little noticeable wane
  3. It must contain a high level of pure essential oil for marketing purposes
  4. The actual product and it’s presentation must be classier than cheaper alternatives.

Our budget was $20,000 to get this project off the ground. And every layer we peeled off this onion of an industry made us more motivated to peel off the next layer.

We would save a considerable amount on ecommerce by leveraging on existing resources we already had. So this budget is meant to get us a finished product that is ready to go.

Right To The Source

Silhouette of bangkok

I do have a number of different brands of reed diffusers sitting in my store room. And the ones that have the best and strongest scents are those that I bought as a tourist in Bangkok.

If you are familiar with this industry in Thailand, a few labels would probably pop immediately into your head.

And you would have probably guessed right.

I am not going to name names. Not because I have bad things to say about them. But I really don’t want to inadvertently influence you.

Anyway, the original plan was to import white label reed diffusers from the best products’ suppliers or manufacturer. The private label as our own.

But it soon turned out that most of these players were not very willing to white label their merchandise. That, or they already had low-key exclusive distributors in our region of operation. Bummer…

The few enthusiastic responses from our shortlist of suppliers were actually very helpful.

But on testing more samples from those who would entertain our inquiries, we realized that their products were not as high a quality as we wanted.

Many stopped diffusing aroma within a week. What’s left is a bottle filled with a yellow liquid and dark stained reed sticks sticking out from the top.

Gone was the cheerful shade of yellow. Bleeding from the reed sticks also made the solution a darker rusty yellow.

We just could not visualize the these products selling at $50 a pop.

Now I know many business people will have no qualms with selling inferior products at $50. But I have the principle that if I were to sell a $50 item, I’d want it to deliver $50 worth of value or perceived value or more.

So after exhausting the shortlist of businesses we’d like to import from, we had to turn our attention to putting this product together ourselves.

The Jigsaw Puzzle

piece together a plan

I approached this stage with a fun attitude. I really felt that it would be fun to meet and learn from professionals in an industry that I had never got involved in before.

Yet… make no mistake. We were novices in the world of aromatherapy and essential oils. But we are not rookies in doing business.

It was time to get really busy.

Coincidentally, this was about the time when our designer came up with the logo incorporating the brand name we would eventually use. We then paid up for the domain and registered our vanity URLs with social media accounts.

Anyway, the list of items and parts required to source for include:

  • clear or frosted square bottle (250ml/8.45oz)
  • metallic or wooden cap
  • white or black reed sticks
  • essential oil blend
  • box that cater to the bottle dimensions
  • packaging design

There are actually a hosts of suppliers offering these things at wholesale prices. So there was no lack of businesses to reach out to.

The bottles, caps, and reed sticks were easy. We settled on the suppliers pretty fast. We would either buy in bulk quantities for a low price per unit, or get them close to retail price if we take on much lower quantities resulting in a lower total capital outlay as we test the market with the first batch of products.

Even at retail price, it was still affordable. Even if it exceeded our original assigned budget on each item, the first test run to see the response from the market is the priority.

We also went on Alibaba to see what the Chinese had to offer. What impressed me most was that many suppliers responded to chat requests almost immediately at any time of the day.

This was the easy part.

The biggest obstacles started to come up when sourcing for essential oil suppliers.

Alcohol

For oils in reed diffusers, there has to be an element of alcohol in the mixture so that it will evaporate more easily and carry the scent and essence of the oils with it.

This means that it is no longer feasible to create a reed diffuser that can claim to be “100% pure essential oil” which we originally felt could be a strong unique selling point. We can however put on the hat of a marketer and play with words like “made with pure essential oil” or “contains 100% pure essential oil”.

In fact, we learned during this experience that diffusers which can fill up a big room with it’s scent probably contains way more alcohol than we think.

This makes perfect sense as alcohol evaporates at room temperature. As it dissipates into the air, it carries the scent of the oil with it.

If pure essential oil is used for a reed diffuser, a room would hardly carry the oil’s scent because of a lack of alcohol as a diffusing agent.

Then a check with customs found that if we were to import diffusers containing alcohol, the products will be liable for extra tax in order to enter the country.

So we figured that to side step this minefield, we’d buy our oils from local or national vendors. This means that the oils would already be taxed.

Other than that, we remove the risk of damaged goods in transit while being shipped here from another country.

So off we go.

Local suppliers

The response we got from local suppliers was what really surprised me.

It was not difficult to reach sales people and their managers. But it seemed like almost all of them were more wary about us being competitors in disguise rather than genuine prospects.

I can totally understand the care you put in to avoid becoming a tool in your competitors’ market research. But this was ridiculous.

I’ve never faced so much challenges as a customer.

Some even demanded my full name and proof of identity before sending me a quotation.

Only about 2 in every 10 companies we contacted sent us their prices. We then sent couriers to collect samples from them. By a stroke of luck we found that the ones who treated us like customers had quality oils that met the standards we’ve set for ourselves.

A company then invited us to visit their manufacturing plant which we happily accepted.

This was a company that had it’s own blending and testing laboratories. It was this time when I learned that most cafes, and even bakeries, get their aromatic scent in their stores from oil blends rather than the food itself.

They even have a storage facility containing countless labelled bottles of particular scents/brands they have duplicated.

You learn something everyday.

In fact, these professionals challenged us to bring any perfume or oil blend into their lab. And they have the technology and capabilities to reverse-engineer almost any scent.

I believed them.

We liked the dependability of this particular company and can see a fruitful working relationship starting soon.

And then there was the packaging…

The issue with packaging

I had expected problems with packaging. But the scale of the issue was hard to stomach.

You see, if the reed diffuser is just a product of bottled essential oil blend, it would be a pretty straight forward case of packaging a fragile glass bottle that contains liquid.

But that is child’s play compared to reality.

The reality was that reed sticks had to be included in a reed diffuser no matter what shapes or forms your bottle takes on.

This presented a packaging challenge to box structure designers.

As the reed sticks we decided on would measure 7 inches, it would be several inches taller than the height of a 250ml/8.45oz square bottle which we will use.

This would result in a lot of empty space in the box.

And as you would know instantly if you tried it by hand, putting a glass bottle in a box with a lot of vacant space is suicidal.

This means that the box we use must be able to secure the bottle in place while cushioning blows it might have to endure in transit.

This design issue was the excuse designers used to quote us a high price for “creative work”.

At this point, our website was live with a nice looking landing page. We were ready to ecommerce the hell out of this.

We could of course replicate the many packing solutions many existing diffuser retailers are already doing. And we were open to that option.

But we felt that going through the design process would teach us more about the product we intend to sell.

What’s surprising though is that many of the box-makers we inquired with never had any experience crafting boxes like these.

Nevertheless, we settled on one and move on forward with the project.

Assembly

It’s actually not that difficult to put this product together as long as we have all the parts ready.

  1. pour the oil blend into bottle with a funnel and seal it
  2. paste stickers and labels on bottle
  3. pack bottle and reed sticks into box including bubble wrap
  4. double pack for delivery

It does look easy. But when you put the factor of volume into the equation, it can get hectic when sales picked up.

But even so, seeing orders come in should be motivation enough to assemble them for the couriers to collect.

Anyway, we already have some people in mind who will be delegated these tasks. We even have an empty room that can be used as an “assembly line” just for this activity.

Logistics

I am one of those who believes that logistics is one of, if not the most, important aspect of a retail business. Especially if it is taking on a considerable online presence.

The magnitude of dependable delivery service providers becomes more critical when you consider the fragile glass diffuser bottles we were working with.

So this was not an area which I was ready to comprise on.

I looked up 3 of the better known delivery companies, spoke to their sales representatives, got their rate cards, and decided on the one with the best reputation.

The Collapse

escape from danger

I was really pumped. Everything was sorted out. It was now a matter of

  1. pressing the order buttons
  2. wait for the supplies to arrive
  3. put everything together into the finished product
  4. start selling and generate revenue
  5. and deliver
  6. rinse and repeat

We could finally launch our test run. Even if it failed, we could at least accept it as a real-world answer to our business. Not a theory or a naughty thought.

But we were quietly confident. We had the backing of online marketing experts, we had the whole fulfillment cycle mapped out into a system, and it was actually a really good product.

And alas! It just had to happen.

The diffuser blend suppler had to throw a spanner into the works. They decided to raise their prices by 100% of what we were previously discussing.

How shrewd they were not to give us an official quote during our correspondences.

This effectively meant that we would lose money for every bottle being shipped. Not an ideal situation for any company…

And there is little sense of security when you know that 1 event can throw your whole business operation into jeopardy.

It was at this time that I took a step back and rationalized this project in a more pragmatic standpoint.

Is this really worth it?

Walking Away

rest and relax on beach

Even though the many minor issues like box design, bottle transport, and delivery to customers, were settled and agreed upon with vendors and service providers, I can foresee a lot problems which I will have to rectify when the wheels start turning.

This means that even though the numbers we had collated on paper falls within our initial budget, there is every likelihood that the budget bubble could very possibly burst.

We would of course, continue to go for it having gone that far.

The situation now was that we still had a choice. It hasn’t reached a point where there was no turning back.

Here are the 6 main problems with this product that determined my decision to walk away:

  • fragile glass
  • liquid product contained in glass
  • short shelf life
  • many different suppliers independent from each other where the mistake of one can hold up the whole operation
  • too much risk for too little rewards
  • nothing unique about our product other than it’s brand

All in all, this whole journey took about 6 weeks. It could have easily halved if manufacturers and wholesalers had responded as quickly as what we felt was a reasonable response time.

Hopefully, you can learn something from my eventful experience if you are looking to enter the market for reed diffusers. Remember to hustle when doing your sourcing activities. These people will eat you alive if you behave like a prey.

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