How to Start Essential Oil Business in UK USA (Business Plan)

Essential Oils Business

Do you have these questions in your mind?

  • How to start an Essential Oils Business
  • How much money do you need to start an Essential Oils Business?
  • How much money can you make from Essential Oils business?
  • What licenses will you need for your Essential Oils business?

 

In this article, you will find answers to all your questions. So please grab a cup of coffee, and let’s get started.

Table of Contents

What is an Essential Oils business?

With a worldwide value of around $13 billion and a compound annual growth rate (CAGR) of 6.7%, the Essential Oils business is one of the world’s most trending and popular industries. 

 

Essential oils are concentrated liquids extracted from plants containing natural fragrance and chemical compounds of the plant. They are typically extracted through steam distillation or cold pressing and can be derived from various parts of the plant, including the leaves, flowers, stems, roots, and bark.

 

Essential oils have been used for centuries for their therapeutic and aromatic properties, and their popularity has only increased in recent years. 

 

If you’re passionate about essential oils and want to turn that passion into a business, starting an essential oils business could be a great option.  

 

The Essential Oils business is a significant part of modern and traditional culture & is profitable; congratulations on your decision to start this business. 

Market Insight: The Essential Oils industry is a significant and growing sector in the United States and the United Kingdom.

In the United States, it is valued at around $6 billion, while in the United Kingdom, the Essential Oils industry reached a total of £485 million.

Essential Oils Business

Steps to start an Essential Oils business

Starting an essential oils business can be an exciting and fulfilling venture, but it also requires careful planning and execution. Here are some steps to help you get started:

 

1. Identify your niche:
Determine what type of essential oils you want to focus on, such as organic, therapeutic-grade, or rare oils. You can also specialize in a specific industry or market, such as skincare, aromatherapy, or natural cleaning products.

 

2. Source quality oils:
Find reputable suppliers who provide high-quality essential oils that meet your standards. Look for suppliers who have a track record of providing pure, unadulterated oils and who have established relationships with growers and distillers.

 

3. Create a business plan:
Develop a comprehensive business plan that outlines your business objectives, target market, marketing strategies, financial projections, and operational details. This plan will serve as your roadmap to guide your business.

 

4. Register your business:
Register your business with the relevant local and national authorities and obtain any necessary licenses and permits.

 

5. Build an online presence:
Create a website and social media accounts to promote your business and showcase your products. You can also sell your products through online marketplaces such as Etsy or Amazon.

 

6. Develop a marketing strategy:
Identify your target market and develop a marketing strategy that will reach them. Consider attending trade shows, advertising in industry publications, or partnering with influencers or bloggers to promote your products.

 

7. Manage your finances:
Keep accurate records of your income and expenses, and consider hiring an accountant or bookkeeper to help you manage your finances.

 

Note: Starting an essential oils business requires dedication, hard work, and careful planning. By following these steps, you can set yourself up for success and build a thriving business.

Essential Oils Business

Types of Essential Oils Business Models 

There are several types of essential oils business models you can choose from, depending on your goals, resources, and preferences. 

 

Here are some of the most common types of essential oils business models:

 

1. Retail:
In this model, you sell products directly to consumers through a physical store or online marketplace. Significant investment in inventory, marketing, and customer service is required, but it allows you to build a loyal customer base and control your pricing and branding.

 

2. Wholesale:
In this model, you sell essential oils and related products in bulk to retailers, spas, and other businesses. You focus on B2B sales and relationship building, as well as a strong supply chain and inventory management system.

 

3. Private Label:
In this model, you create and sell your own line of essential oils and related products under a private label. Differentiate yourself from other brands and potentially earn higher margins, but it requires a significant investment in product development, branding, and marketing.

 

4. Affiliate Marketing:
In this model, you partner with other businesses or influencers to promote their essential oils and related products and earn a commission on sales. Strong network and social media presence, as well as a focus on building trust and credibility with your audience.

 

5. MLM (Multi-Level Marketing):
In this model, you join a larger essential oils company as an independent distributor and earn commissions on sales from your downline. Focus on network building and relationship building, as well as a strong understanding of the company’s products and compensation plan.

Essential Oils Business

Pros and Cons of Essential Oils Business

Pros of an Essential Oils Business

  • High demand for natural and organic products.
  • Potential for high profit margins.
  • Wide range of applications, from aromatherapy to personal care to cleaning.
  • Ability to create a unique brand and product line.
  • Opportunities for creative expression and product development.
  • Flexibility in terms of business model and distribution channels.
  • Ability to work from home or anywhere with an internet connection.
  • Ability to serve a growing market of health-conscious consumers.
 

Cons of an Essential Oils Business

  • High competition in the market.
  • Requires extensive knowledge of essential oils and their properties.
  • Requires significant investment in sourcing and purchasing high-quality oils.
  • Requires compliance with regulatory requirements and safety standards.
  • Difficulty in finding reliable suppliers.
  • Risk of counterfeit or adulterated oils in the market.
  • Limited shelf life of some essential oils.
  • Dependence on consumer trends and preferences.

Trends & Challenges in an Essential Oils Business

Trends:

1. Increased demand for natural and organic products
2. Growing popularity of aromatherapy and holistic health practices
3. Shift towards sustainable and ethical sourcing of essential oils
4. Expansion of product lines to include blends, diffusers, and other accessories.
5. Increasing use of technology to enhance production and distribution

Challenges:

1. Difficulty in sourcing high-quality and authentic essential oils
2. Adulteration and mislabeling of essential oils
3. Complex regulatory landscape and compliance requirements
4. Intense competition in the market
5. Dependence on consumer trends and preferences

Investment required to start an Essential Oils Business

The start-up costs for an Essential Oils Business can range from £30K – £300K in the UK, while in the US, it’s around $50K – $500K.

 

But it heavily depends upon the size, the type of oils, the location of the factory, and the resources and infrastructure already in place.

 

Few key factors that can affect the cost of starting an Essential Oils Business:

 

  • Land
  • Infrastructure
  • Oils
  • Ingredients
  • Equipment 
  • Labor
  • Certification
Essential Oils Business

How much does the Essential Oils business make?

As mentioned above, there are lots of different types of Essential Oils Business that you can choose from. And the average revenue of your business will heavily depend upon the type of business you choose.

 

It’s difficult to provide an exact average annual revenue for an essential oils business in the US & UK, as the revenue can vary significantly based on various factors, but as an essential oil business you can expect an average revenue of around $20K-$100K in the US and in the UK, you can expect around £10K-£50K.

 

Note: The actual revenue can vary based on various factors, and it’s essential to conduct thorough research and planning to determine the specific income potential for your business.

Market Insight: One of the biggest Essential Oils Business in the world, doTERRA International, earns about $940 million dollars in revenue every year.

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Essential Oils Business

Types of Essential Oils you could sell!

There are many different types of essential oils, each with its own unique aroma and therapeutic properties. 

 

Here are some common types of essential oils:

 

  • Lavender
  • Peppermint
  • Lemon
  • Tea Tree
  • Eucalyptus
  • Frankincense
  • Rosemary
  • Chamomile
  • Ylang Ylang
  • Sandalwood
  • Bergamot
  • Cedarwood
  • Cinnamon
  • Clove
  • Grapefruit
  • Jasmine
  • Neroli
  • Patchouli
  • Pine
  • Vetiver
 
Note: As a startup, you may or not may have the sufficient funds to buy raw materials, ingredients, or the readymade wholesale oils to sell at first, but, THAT’S OKAY! Start with oils you can afford and sell and then let your options grow as your business does.. 
Certification and Registration

Certifications needed for an Essential Oils Business

While essential licenses such as Business Licence, Health and Safety regulations, and Sales Tax Permits apply to almost all businesses (To read more about the licenses, ‘Click Here to read our Mini Guide’). 

 

Some specific licenses and permits might be needed to open an Essential Oils business in the UK and the US. Those licenses are as follows :

 

 

UK: 

 

1. Good Manufacturing Practice (GMP):
This certification ensures that the products are consistently produced and controlled according to quality standards.

 

2. European Regulation (EC) No 1223/2009: 

This regulation sets safety and labeling requirements for cosmetic products.

 

3. International Organization for Standardization (ISO) 9001: 

This certification establishes quality management standards for the business.

 

4. Hazard Analysis and Critical Control Points (HACCP):
This certification establishes safety measures in the production process to prevent contamination or other hazards.

 

US:

 

1. National Association for Holistic Aromatherapy (NAHA): 

This is a professional association for aromatherapists that provides education, resources, and certification programs.

 

2. American Herbal Products Association (AHPA):
This is a trade association that represents the herbal and botanical products industry and provides guidance on regulatory and quality issues.

 

3. United Plant Savers (UPS):
This is a nonprofit organization that promotes the conservation and sustainable use of medicinal plants and provides guidelines for ethical sourcing and harvesting.

Essential Oils Business

Checklist of Essential Oils business equipment

In an Essential Oils Business, getting the right equipment so you can better preserve and store your plants is very important. 

Here is a list of essential equipment that you may need for an Essential Oils Business 

  • Distillation equipment
  • Essential oil bottles
  • Label printer
  • Scale
  • Storage containers
  • Mixing bowls and spoons
  • Safety equipment
  • Packaging materials
  • Computer and software
  • Marketing materials
  • Essential oil diffusers
  • Essential oil storage racks
  • Testing equipment (such as pH strips)
  • Heat-resistant gloves
  • Pipettes and droppers
  • Funnel
  • Cleaning supplies (such as rubbing alcohol and distilled water)
  • Shipping labels and postage
  • Business cards and stationary
  • Essential oil books and reference materials

A typical day at an Essential Oils Business

1. Check and respond to customer inquiries via email or phone
2. Blend essential oils to create new products
3. Fill and label bottles with essential oils
4. Manage inventory and restock supplies as needed
5. Process and ship orders to customers
6. Conduct market research and plan marketing strategies
7. Attend networking events or meetings with suppliers
8. Create business documents such as invoices, receipts, and contracts
9. Respond to feedback and reviews from customers
10. Continuously learn about essential oils and related products

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Essential Oils Business

Steps you can grow your Essential Oils Business!

Here are general step-by-step instructions for growing an Essential Oils Business: 

 

1. Build a strong brand:
Develop a unique brand identity that sets your business apart from competitors, and create a consistent visual and messaging strategy.

 

2. Expand your product line:
Offer a wider variety of essential oils, blends, and related products to cater to different customer preferences.

 

3. Engage with customers:
Build relationships with customers by providing personalized recommendations and responding promptly to feedback.

 

4. Offer educational resources:
Create and offer educational resources such as blog posts, ebooks, and webinars to help customers learn about essential oils and their benefits.

 

5. Partner with complementary businesses:
Build partnerships with other businesses that complement your product offerings, such as yoga studios or massage therapists, to cross-promote and increase exposure.

 

6. Implement an email marketing strategy:
Build an email list and use email marketing campaigns to promote new products, offer discounts, and stay in touch with customers.

 

7. Invest in advertising:
Consider investing in paid advertising on social media or search engines to increase visibility and drive traffic to your website or physical store.

Some potential customers for your Essential Oils Business

1. Health and wellness enthusiasts
2. Yoga studios and wellness centers
3. Spa and massage businesses
4. Natural and organic food stores
5. Beauty salons and spas
6. Eco-friendly households
7. Fitness centers and gyms
8. Alternative medicine practitioners
9. Pet owners
10. Parents with young children

Essential Oils Business

Shall I go for an Essential Oils Franchise?

Buying an existing Essential Oils Franchise of a recognized brand is a good idea; however, it is expensive also.

On the other hand, the franchisor will benefit you will all the existing brand image, customer loyalty, advertising, market research & strategies.

In addition, you will get guidance from the franchisor about training the workforce & ambiance of the premises. 

Some of the top Essential Oils Franchises in the UK and USA:

UK:

  • Neals Yard Remedies
  • Tisserand Aromatherapy
  • Essentially Yours
  • Quinessence
  • Aromatherapy Associates
 
USA:

  • Young Living Essential Oils
  • doTERRA
  • Massage Envy
  • The Joint Chiropractic
  • Elements Massage

Conclusion

Yes, an Essential Oils Business is a good idea; the profits are rewarding. However, you need to analyze your capabilities and limitations as there is no restriction to growing.

 

The Essential Oils market has expanded due to the growing demand for these products.

 

Success in the Essential Oils business depends on local demand for your products, land and labor availability, and the ability to follow regulatory and certification systems.

 

Good Luck! 

Want to Save Time in your Business Launch?

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  • Buying an Old Business Vs Franchisee Vs Own Brand from Scratch

Handpicked inspirational Youtube videos for you

The Truth About Essential Oils — and How They Get You to Buy and Sell Them – YT Channel ‘Mic’ 

How to Make Essential Oils – Homemade Essential Oil Recipe – YT Channel ‘WaysAndHow’

A. Essential oils can be sourced from various suppliers, including wholesalers, manufacturers, and distributors. It’s important to research and choose reputable suppliers that offer high-quality products.

A. The legal requirements for starting an essential oils business may vary depending on your location. It’s important to research and comply with all relevant regulations related to business registration, licensing, and labeling requirements.

A. You can market your essential oils business through various channels, such as social media, email marketing, advertising, and attending trade shows and events. It’s important to understand your target market and tailor your marketing strategies accordingly.

A. Common challenges in starting an essential oils business include high competition, sourcing high-quality products, developing effective marketing strategies, managing inventory, and building brand recognition.

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