Is money disappearing faster from your pocket than your wrinkles?

Posted by Kevin Kenneth on 5/4/2011

I recently read a skin care blog about companies charging exorbitant prices for skin care products, thus calling anyone charging over $25 for a product a rip-off.

To this blogger charging $40, $50, $60 or $100+ for skin care products is a rip-off and a bad investment...and how could anyone charging those prices for skin products sleep at night?

For us men a beer analogy always works:  Have you ever gone to a bar and asked what's on tap only to spend $4 or $5 for that cold beer?  Do you know that in most cases, it cost the owner of the bar about $.20 for that pour.  So, how can they charge 25 times the actual cost and sleep at night?

But as the blogger above failed to mention, it's not just the cost of the product, it's the overall cost of doing business! It's the cost of ingredients, packaging, shipping, labeling,  the equipment to mix and package it, labeling (or the company that is outsourced to do that and the shipping).

That is just for starters.  Add to that:  insurance, R&D, QA, rent, electricity, phones, salaries (a huge overhead), taxes, supplies, legal and professional fees.  And how much do we spend on a ounce of toner ink and it does even make us look better.

And then there is skin care marketing and advertising (how about that $3.00 - $10.00 for one keyword click on Google...which probably won't be a sale), print ads, television and website operations, maintenance and hosting...and the I.T. guy and marketing people to do it all. And then what is left over, the owners/shareholder get.

And in our specific case, the ingredients in our skin products are purchased from several suppliers which adds to ever increasing shipping costs.

I am sure we have all heard about the prices being charged for skin care.  But, if we fully understand all that it takes to produce one unit of product and can tell that story to the public, that might be all it takes to increase sales.

The bottom line is...if you have a product people love, they will pay just about any price to be happy.  And that is they way it should be. Sleep well.

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