Essential Oils vs. Fragrance Oils: What's the Real Difference?

If you're making your own soaps, perfumes or body care products to sell at farmers markets or give to friends, you've probably wondered about oils and whether you should be using essential oils or fragrance oils, and what the difference is between the two.

The truth is, both have their place and it really depends on the types of products you’re creating and who for. In this guide, we’re going to look at both oils, the best uses for each, and the key differences between them to help you create products that people love.

What Are Essential Oils and Fragrance Oils?

Essential oils 

These come straight from plants and are often referred to as nature’s perfume. Essential oils are  produced by steaming plant parts like leaves, flowers, or bark, or by pressing citrus peels. What you get is a concentrated liquid that smells exactly like the plant it came from, with nothing extra added.

Fragrance oils 

Unlike essential oils, these are synthetic and most are made in labs to recreate the smell of specific flowers or plants. While some fragrance oils might have natural ingredients mixed in, they're designed to create scents that either don't exist in nature or would be too expensive to get naturally, such as rose.

Here's a useful table to help you understand the key differences when it comes to selecting your oils:

Key Differences in How They're Made and Used

Source and Production

Essential oils can only come from plants that naturally produce oils. For example, You can't make strawberry essential oil because strawberries don't have the right kind of oils in them. But you can get strawberry fragrance oil that smells just like the real thing.

Fragrance oils give you far more options. So, if you want to create a  soap to smell like fresh cookies or ocean breeze, fragrance oils are what you should use. Whereas essential oils are more limited to the scents that already exist in nature, such as lavender, peppermint, tea tree, and other plant scents.

Scent Strength and Variety

Fragrance oils often smell stronger and last longer than essential oils , so if you're making products where you want the scent to really pop,  like body sprays or room sprays, floral fragrance oils might be your best bet.

Essential oils tend to be more subtle. Some people love this because it feels more natural and gentle. But if your customers want bold, long-lasting scents, you might need to use more essential oil, which costs more money.

Shelf Life

Most fragrance oils last longer on the shelf than essential oils. Some essential oils, especially citrus ones, can go bad within a year if not stored properly. Fragrance oils are usually more stable and can last several years.

When running a business, it’s important to be aware of things like this and think about what products you’re likely to create so that you don’t waste money on buying ingredients that end up going bad before you’ve had a chance to use them.

Which Oil Is Best for Personal Care Products?

Again, there’s no right or wrong answer to this and it very much depends on the types of products you’re creating and who you’re creating it for. This is why it’s crucial that you take the time to fully understand what your customers want from you so that you can create the right products to meet their needs.

For example, if your business creates products like bath bombs or body sprays for teenagers, then you’re more likely to be using fragrance oils rather than essential oils.

Below are some examples of the different products you can create using each oil, which ones are most suitable, and how they can overlap.

Skin and Hair Products

If you're making things like lotions, face creams, or hair oils, essential oils might be worth the extra cost. Many people believe essential oils offer benefits beyond just smell. Tea tree oil, for example, is often used  for problem skin, and lavender is popular for relaxation.

However, when using essential oils, they  need to be diluted properly with a suitable carrier oil and they should never be used  straight on skin. A good rule is 1-2% essential oil in your final product. That means 1-2 drops per teaspoon of your base product.

Fragrance oils are great for products where scent is the main goal, like body wash or hand soap. Although fragrance oils are synthetic, they’re usually designed to be kinder on skin than you might think, but of course, you should always check the safety information that comes with them.

Massage and Body Oils

For massage oils, many people prefer essential oils because they want the aromatherapy experience that these oils provide as well as the other benefits they’re believed to have. You can certainly use fragrance oils when creating massage oils, especially if you’re looking to keep costs down. If using fragrance oils that will be applied directly to the skin, you need to make sure that you dilute them with an appropriate carrier oil.

Perfume and Body Spray 

This is where the difference between fragrance oil and essential oil really shows up. Essential oils make perfumes that smell clean and simple with prominent single notes like rose or vanilla.

Fragrance oils let you create complex scents that smell like expensive designer perfumes. They can blend multiple scent notes that change as you wear them, like musk.

Choosing Between Essential Oils and Fragrance Oils

Here's how to decide what's right for your products:

Choose essential oils when:

• Your customers want natural ingredients
• You're making wellness or aromatherapy products
• Your brand focuses on "clean" or "natural" products
• You don't mind paying more for natural ingredients

Choose fragrance oils when:

• You want unique scents (like "fresh linen" or "vanilla cupcake")
• You need stronger, longer-lasting scents
• You want to keep product costs down
• Your customers care more about scent than whether it's natural

Consider allergies and sensitivities. Some people react badly to certain essential oils, while others can't handle synthetic fragrances. Know your customers and ask some questions if needed.

A Note for Small Business Owners

If you're selling products made with these oils, here are some tips:

Product positioning matters. If your brand is about natural wellness, essential oils fit better with your message. If you're all about fun, unique scents, fragrance oils give you more options.

Think about profit margins. Fragrance oils typically cost less, which means more profit for you. This is especially important for products like soap or body spray where customers might not want to pay premium prices.

Know your customers. People who shop at natural health stores might expect essential oils. People buying fun bath products might prefer creative fragrance oil scents.

Safety first. Always include proper usage instructions with your products. Tell customers how to dilute oils safely and what to avoid (like using citrus oils before sun exposure).

Keep good records. Know exactly what oils you use in each product batch. This helps if customers have reactions or questions.

Making the Right Choice for Your Business

The difference between fragrance oil and essential oil doesn't have to complicate your business. Many successful small businesses use both, depending on the product.

Essential oils work great when you want to appeal to health-conscious customers or create simple, natural products. Fragrance oils are perfect when you want to offer unique scents or keep costs manageable.

The key is being honest with your customers about what you use and why. Most people appreciate transparency and will respect your choices when they understand the reasoning.

Remember, whether you choose essential oils, fragrance oils, or both, what matters most is creating products that your customers love and that represent your brand well.

Africa Imports offers both essential and fragrance oils in sizes perfect for small businesses. From single bottles to bulk quantities, we help small creators like you get quality ingredients at prices that work for your budget. Browse our selection and start creating products that stand out at your next farmers market or craft fair.

Frequently Asked Questions

Is fragrance oil the same as essential oil?

No, they're completely different. Essential oils come from plants, while fragrance oils are usually made in labs. Both can smell great, but they're made differently and often used for different purposes.

Are diffuser oils the same as essential oils?

Not always. Some diffuser oils are essential oils, but others are fragrance oils made specifically for diffusers. Always read the label to know what you're getting.

Are essential oils better than perfume?

It depends what you mean by "better." Essential oils are natural, but traditional perfumes often last longer and have more complex scents. Some people prefer the natural option, while others want the long-lasting scent of regular perfume.

Can I use them interchangeably?

Sometimes, but not always. For skin products, you need to check safety guidelines for each type. For scenting products like candles or room sprays, you can often use either one, but the results might be different.