small reflections on the variability of cosmetic prices

We can only note the variability of prices in cosmetics from 2, 3 euros to hundreds of euros for very small capacities of 20, 30, 50 ml. Excluding "super luxury" products, we can estimate the average variability of prices from 1 to 25 and this variability is not correlated to the quality of the product or to its manufacturing cost.

As for any product, there are manufacturing, development and packaging costs. In cosmetics, there are additional costs related to the marketing of the product; the latter is free of charge, but it involves a long regulatory process (during which the product cannot yet be sold), analyses and toxicological reports, which have a cost. I will not forget the operating costs of the company itself, the manufacturing equipment, the website etc...

The packaging, which must meet the requirements in terms of hygiene and safety, represents an important part of the cost of cosmetic products, especially since we work on small quantities. For artisanal manufacturers, the cost in time is also very important since it takes much more time to pack 500 jars of 50ml than a jar of 5 l; there are also 500 labels instead of one and in cold process soap making, the cutting of the soaps is necessarily done by hand... Working by hand also implies working with smaller volumes and the supplier prices are obviously not the same if you buy 100.000 or 5.000 jars. In short, the cost of the finished product cannot be reduced to the simple addition of the prices of ingredients and containers.

When you create your company and prepare to sell your products, the question of defining the selling prices arises and I thought to myself that we should not forget one essential thing: in the end we sell a product and not a jar! As a consumer, I analyze what I buy and I can only be dubious when faced with a product containing 80% water (a neutral and very cheap ingredient) sold for 15, 20 or 50€, whereas you can find anhydrous creams (without water) and therefore composed of 90 to 100% active ingredients at the same price or cheaper. I'm not making any negative judgement on creams and emulsion products that require water; I'm simply stating the fact that a significant part of the cosmetics market is disconnected from the manufacturing cost. The marketing part is very strong, an important part of the price is linked to the image, the prestige etc. Is it good, is it bad?

As a manager of Floreleï, I want our products to be affordable and I decided to define our prices according to a brand rate applied to all our products; a simple and clear pricing. The brand rate (a nice term that I did not invent) corresponds to the commercial margin (sales price minus the price of raw materials) divided by the sales price multiplied by 100 (you still follow me?... PV-PM/PV*100). Our prices are therefore defined in direct relation to the manufacturing cost.

As a consumer, I give you the elements I consider when I evaluate the price of a cosmetic... (I do not address here the question of quality which, although it is dear to our hearts, is not the subject of this post).

• the composition (water / no water - organic / non-organic ingredients since organic ingredients are more expensive to buy)
• the container (plastic is much cheaper than glass to buy but also for transport because it is much heavier); the purchase price of jars and bottles is very variable because some containers can be very elaborate (silk-screen printing, prestigious shapes, etc)
• handmade or industrial production (the first one has a much higher production cost compared to the finished product).