By Bernie Cahiles-Magkilat
Perfumery is a business usually associated with the western countries, but many Filipino entrepreneurs dared to make their marks in this business.
One of the more successful perfumery ventures in the country is Augustus Perfumeria Philippines Corp. by a Mindanao-based entrepreneur JACK JAKOSALEM.
Jack’s entrepreneurial skills were developed when he was yet working in Manila with some networking firms. But the native from Cagayan de Oro city had a hard time reconciling himself with the hustle and bustle of a big city. He hated the traffic and frenetic life that in 2009 he left for his hometown province Cagayan de Oro.
On his return, Jack put up a small business as a turnkey supplier for all kinds of carts businesses. His services include construction of the cart, paintings, signages and supplies when necessary.
“I had different kinds of food cart concepts from burger buy-one take-one to dimsum, French fries, fish ball and everything related to food cart business,” says Jack.
The food cart business has its own challenges, too. This forced Jack to look for a fallback. A friend suggested the scents and perfume business. It was appealing and Jack started doing research about perfume in 2015.
“Unlike the food cart business which limits me up to Mindanao area only, I can go mainstream with the perfume, I saw the potential,” says Jack.
There is also an increasing demand for perfumes.
The importance of perfumes dates back to the ancient times and demand grows because of its many attributes.
Their sweet-smelling characteristics and other attributes make perfume very valuable to people of all languages. Today, perfumes of various qualities are being produced as the demand for them has increased.
Perfumes are confidence booster, mood enhancer, can reduce stress and can induce attraction.
Body odor emanates from the body and this could cause a shake in confidence when meeting people.
The sweet-smelling fragrance of the perfume will remove whatever anxiety you might feel when meeting people. Having a perfume in hand can quickly enhance your mood no matter how sour your mood is. If you are feeling down or angry, a wonderful perfume can boost your mood.
When morale is low, perfume can lift your spirits and people around you.
Perfumes have therapeutic attributes. They help to calm the body, which means that they help to reduce stress.
The prospects of the perfume business has led Jack to give up his food cart business after a year and decided to concentrate on perfumery.
He then looked for suppliers of fragrances from France, Bangkok, Barcelona and UK.
He learned mixing the scents and proper proportions to create a scent. “I created my own mixes that I asked my friends to try them on,” he adds.
Augustus Perfumeria Phils Corp. was born as a perfume retail store that offers a carefully selected spectrum of scents for the modern day Filipino.
He called after the Greek god for perfume: Augustus.
“Augustus is designed to make people look, smell and feel good about themselves. Our scents are inspired from luxury brands that are refreshing yet comfortably familiar at affordable prices,” says Jack, who earned his BS Sociology degree from Xavier University.
At first, he was reluctant with the name Augustus because it was a masculine name and it might discriminate the females, but he pursued the name. Jack started selling online first and direct selling to friends and relatives until he developed a niche market and got repeat orders for his scents.
“I told myself I need to be serious now as orders start to come in,” he adds. Jack put up a kiosk in a mall in CDO in early 2016 and later expanded to another mall until he reached a total of 14 outlets all in Mindanao.
In July 2017, Jack started offering the franchising business with the help of Francorp, the country’s franchising authority.
“Now, I have 43 branches nationwide including 22 franchises and the rest are company-owned,” says Jack, who still maintains Cagayan de Oro as the company’s headquarters.
Augustus has slowly conquered Metro Manila and some areas in Luzon with branches in major malls.
“There are still pending applications for franchises in different parts of the country,” says Jack.
The entire franchise system is very affordable at P450,000 total turnkey project, including P188,000 in franchise fee. The kiosk is just 2.5 square meters and requires only one sales clerk.
“It is very affordable and we supply all products,” adds Jack. Return on investment is expected on the 9th month based on P8,000 per day sales. The most affordable Augustus perfume is P179 for a 30 ml bottle.
Jack targets OFWs and young entrepreneurs who really understand about personal care products. Its youngest franchisee is a 25-year old who now runs two stores.
The market for Augustus ranges from college students to professionals from all walks of life.
“Our market is upper Class B and C but we also capture class A. In terms of age, we have average age of 18,” adds the CDO-based CEO.
The best seller is the perfume for women particularly the raspberry and dewberry scents.
“Challenges are inevitable, but we have to think out of the box always for solutions,” says Jack.
To promote Augustus, the company conducts monthly promotions to introduce new products. So far, they have 15 different perfume scents each for men and women. They also try to introduce new products each month.
Augustus also offers free membership cards for a minimum purchase of two items. The card can earn 3 points every time a purchase is made that can be used to buy other products for the next purchase at additional discount.
Sales clerks also do promotion on site by actively enticing passers-by or mallgoers to try their perfume. Once the perfume is sprayed or put on their wrist, they would love the scent. Augustus scents stay the whole time while they are in the mall.
“That is why we make it a point that mallgoers experience our perfume because only then they can be enticed to buy,” says Jack.
Unlike other local perfumes, Jack uses glass bottles that he personally designed. The scents are still imported because there is no local source. There used to be efforts for Sampaguita and Ilang-Ilang extracts but these have not been successful.
Jack has ensured his brand is protected with a trademark from the Intellectual Property Office of the Philippines.
With a bustling business, Jack aims to double by next year the current 43 outlets. This means approving more franchise applications.
Part of the expansion is an overseas program. “India and Vietnam are potentially the first countries to go to because I already have contacts there,” says Jack, adding they expect to launch its overseas expansion a year from now.
While they have plenty of applicants, Jack said approval has been hampered by location.
“We have to wait for months to get our desired space in a mall,” says Jack noting they prefer to locate in a mall because of the foot traffic. Perfume also needs to be stored in a cool place because it can easily evaporate in a warm area.
While the perfume market is booming, it is also besieged by several players from both local and foreign brands.
“Competition is stiff that is why we really have to think out of the box,” says Jack. Augustus is now being offered to interested direct dealers without the need of franchise arrangement.
“You just have to sign up with us for a minimum fee and you get a dealer kit, card and discounts,” he adds. Some dealers even get bulk supplies for corporate giveaways.
Augustus is the first perfume brand that allows dealership arrangements. The card also earns points that they can use to pay some of the purchases on top of the discounts of future purchases. Top sellers also enjoy some freebies and additional discounts. But Jack shies away from the networking sales scheme.
With an already established perfume brand, Jack is also looking at expanding their product portfolio.
“We’re doing research and development now for skin care products,” he adds. The plan is to partner with a Korean and US firms.
He is looking into the Korean-type of products for skin lotion and serums like skin whitening, anti-aging, and moisturizing creams. They are also planning of launching the Augustus Search for Ambassadors.
Jack admitted that people tend to stereotype if not discriminate provincial or regional brands. That is one thing that Jack had to overcome by bringing Augustus to Manila. But Jack also noted of some regional brands have been successful also.
“It was a challenge that I come from the province, but once they see my products and the personality of my perfume, they cannot distinguish it as a provincial brand,” says Jack.
To overcome that stereotype that most provincial products are inferior to the capital city, Jack invested in proper packaging. Augustus is packed in such a way that it conveys simple elegance. They are using glass bottles unlike some competitors, which are using plastic containers.
“I am a product from the region, but I was able to capture the mainstream. It is important that Augustus is accepted in Manila that is the reason I came back to Manila,” says Jack.
“But going back to the province and putting up my own business was the best decision I made in my life,” says Jack. It’s been six years since he ventured as an entrepreneur.
And in just three years, the regional brand perfume is slowly encroaching into the mainstream Manila market.
The regional outlets though still account for the bulk of sales, but the stores in Sta. Lucia and Starmall in Manila are doing great.
The three-year old perfume company is already planning of undertaking some CSR projects for the deaf and mute community to give back.
“This business can be easily copied because the process is simpler, but growing and sustaining the business is difficult,” Jack finds out. In fact, only a few perfume brands have sustained operations most of them just come and go. But not for Augustus, which employs 60 people.
As a manager, Jack puts emphasis on the proper flow of communication among his people.
“I am not strict but I trust my people. Once you trust your people, they become comfortable with you and perform better. I am nice and I have lots of patience,” he adds.
He also learned from several mentors from whom he derived his strength. He learned from them never to give up.
He recalled that when he first started his perfume business, the first store did not make money in the first two months. “Instead of giving up, I opened another store in another mall to know what went wrong. The second outlet made money. It’s been very inspirational,” he recalls.
His advice to would be entrepreneurs is to always make a plan and a vision because that will serve as a guide that will lead to where you want to go.
“If you have no plan, it’s going to be chaotic, but with a plan you have something to look back on when things go awry. It is also important to have a vision,” adds Jack, whose family name arouses curiosity as to his nationality, but his father is a native of Cebu.
“Think a hundred times before making decisions. Most of all, work smart because even if you are hardworking but you don’t work smart all your efforts will just be in vain. There are ways, go where you can cut cost, be a street smart because not all knowledge and skills can be taught in school,” adds Jack, who did not excel in school.
Jack does not consider himself a businessman though, but an entrepreneur stressing that a businessman deals a lot about products to sell for profit, but an entrepreneur is someone who develops something of value to the user.
“A businessman thinks about profit, but an entrepreneur wants to put something into a product to make it valuable. An entrepreneur always thinks how a product can be of value to his user, instead of how much profit he can earn from selling the product. That is the mindset of an entrepreneur,” says Jack.
“I always think, how can my customers get value when they buy from me, from using my perfume. But to a businessman, what matters most is how can I earn from you,” he says.
In the case of Augustus, Jack is proud for making his perfume valuable. Augustus can last 8-24 hours a day depending on the temperature. That is because Augustus perfume is EDP (Eau de Parfum)-based perfume, meaning with high oil content making it long lasting and good for tropical countries.
Most local perfume brands in the Philippines are either cologne-based or EDT (Eau de Toilette)-based, which makes their scents don’t last longer.
“From nothing, I made it to where I am today. There are lots of rejections and failed decisions in life but there’s always a reason to that,” adds Jack.
That’s the mindset of an entrepreneur.