Perfumes have always been considered a luxury and the price you pay for them are worth if they understand the reason behind why they are available at high rates. Do you know what makes them so costly?
Why are they available at such high prices in the market? People should know the real story of why companies charge so much for the fragrance and know why people are ready the prices at the counter. Know what are you paying for?
What adds up to the cost?
After research we have come across some factors that add up to the cost of a single fragrance and the MRP is decided to keep three factors in mind. They are discussed below for a better understanding.
Ingredients – Many potent aromas and other similar ingredients are mixed to obtain a fragrance.
Marketing – Huge cost is involved behind the launch of a product and millions are invested at the initial stage to create a good awareness of the product or a brand.
Packaging – Each fragrance has a unique style and bottle. Many packaging is tried before giving it a final look. Perfumes are generally packed in unique, sophisticated bottles.
The mentioned factors sound reasonable, then you must be thinking about what contributed to the price of a scent that makes it so pricey. Well, we have just discussed the points roughly, you need to take a closer look at each one to conclude why are the perfumes you use so costly.
We all know that there are some ingredients used in the perfumes which can be expensive. Many rare ingredients or the ones that are sought after, ones that are available naturally are practically available similar to the price of gold. However, the majority of brands available in the market are not spending that kind of money on ingredients.
According to the studies, it was concluded that the actual cost of the perfume present in the fragrance accounts to only 6% of the total cost. It is quite a generous cost these days. Chandler Burr in one of his famous books wrote that the price shops charge for a fragrance is not worth the quality they provide. Only 3% of the cost charge contributes to the smell of the scent and the rest is added because of the high costs involved in packaging, margins, advertising, etc. It is because of the cheapness that most “Fine perfumes” are total crap to be used.
Huge profits are made by the perfume companies, and considering this fact you would think that the perfume business is worth doing. However, the industry experts have proved the fact that the margins earned by the companies are not that high as what is assumed by the people, in the end, the share that comes back to the companies after deducting the additional costs involved is similar to the amount insurance companies tend to earn. So clearly, the story doesn’t end here.
Even if you have created the most intoxicating scent in the world and if no one knows about it, how will they buy it? Perhaps, the fact is not surprising that what a person is paying for the bottle of fragrance is the money invested behind its marketing. Every place where they are seen is paid, from ad campaigns, books, magazines, billboards, televisions etc. every place has a price that is to be paid by the brand to have a corner for its product.
Did you know? The most expensive advertisement is made for perfume to date. The 2004 ad that features Nicole Kidman, cost the company flat $33 million for its production. Isn’t the bar set too high? The same year witnessed sales that are recorded for the perfume launched. The ad is still live in the hearts of many. The stated facts must have cleared the fact in your mind that explains what is marketing for a perfume.
Numerous perfume companies are not spending a huge amount on the marketing of its fragrances, still, the amount spent is comparatively high. According to a report of the year 2016, roughly $800 million is spent in a single year on the marketing of fragrances. The report also states that most of the money spent is a waste since many people don’t even pay attention to perfumes ads and it doesn’t interest them.
The companies are still spending huge and the costs are silently passed on to the customers.
A fragrance must have nice packaging and it is one of the key elements of a perfume. The bottle used to store the fragrance should be of good quality and be capable of protecting the integrity of the scent with airtight properties. The box used to cover the bottle should be able to keep the bottle safe from light so that its shelf life is not harmed until purchased. The perfume companies don’t regard it as an important consideration though.
The container of the fragrance should have distinct features, look attractive, and has good brand representing style. The person using it should feel good from the inside. The quality of the box and its weight should be satisfactory enough for the customer and it should seem like he has bagged a good deal in the price paid for the product.
Additional costs involved
There are other costs involved that add up to the total cost and some of them may be optional for many companies.
Perfumers are the ones who create a fragrance. They are also regarded as ‘ghosts’ since even if they are the producers of the product, their identity is not known to the masses. Some people work for some big international brands whose names are not even heard by many. Licensing of a scent also comes at a price. Celebrity status if used for branding. All these are ultimately passed on to the customers by adding to the final prices at which they are sold in the market.
There are various expensive perfumes available and their costs are high due to expensive ingredients used and not because the huge amount is invested in marketing.