Tuesday, April 6, 2010

Scent-Sations Rises Above The Competition

"We make scents, you make dollars." That slogan painted on the side of a van owned by Scent-Sations, Inc., the maker of Mia Bella Candles, sums up an important aspect of the company's success.

Two of three partners in the venture, Bob Scocozzo and Charles Umphred, were successful direct marketers for several years before they joined with Carmen Milazzo to form Scent-Sations. Also known as multi-level marketing, or MLM, direct selling uses a large network of mostly part-time distributors to promote and sell products person-to-person rather than in stores. "When a direct selling business works it is far superior to a 'shelf' industry," Umphred said. "To me it is a superior model."

Unlike its two largest competitors, Partylight and Gold Canyon, Scent-Sations does not use the party model. According to Gold Canyon's website, a party host earns $60 if sales are between $400 and $549.99. The host also is allowed to buy two items for half price. But to get started, distributors must purchase a "demonstration kit" that costs $175. That kind of fee is how most direct marketing companies make money, Umphred said, as well as by keeping the vast majority of the profits. Partylight doesn't even pay hosts in cash, instead offering free or discounted merchandise, according to its website.

Scent-Sations makes it much easier for the distributor to make money. Distributors are free to sell products any way they wish - at parties, craft shows, for fundraising, or by "walking and talking" as they go about their day. Even with incentives like that the typical distributor is looking only for supplemental income and sells $100 to $300 per month.

Scent-Sations goal is to reach the level of a Mary Kay, which has 50,000 or more distributors, many of them earning $1 million or more a year. Distributors reach that lofty income by sponsoring others on whose sales they receive commissions - that's the "multi-level" part. Scent-Sations helps by devoting 37 percent of its revenue to commissions and support for master distributors. Already that has allowed it largest distributors to earn $200,000 a year.

Annual United States retail sales of candles are estimated at about $2 billion. There are more than 400 commercial, religious and institutional manufacturers of candles in the U. S., plus many more small craft producers. About half of the candle sales in the U. S. are of foreign-made products, with China the largest supplier in the nation. Chinese candle producers pay a 108.3 percent duty on petroleum wax (paraffin) candles. To circumvent the duty, they have been producing candles they claim are made of less than 50 percent petroleum wax. The International Trade Commission estimated that the number of production and related workers in the U. S. candle industry had declined by 13.5 percent between 1999 and 2004, due substantially to foreign competition.

(By Ron Bartizek, Times Leader Business Editor)