What the Market Will Bear?

We received a very upfront question about our pricing in email the other day. Thought the writer might not be the only one wondering. Here's her question, and my reply: (Yes, she graciously gave permission to quote her!)

Marge,

I love the descriptions on your site! I really enjoy reading about the various oils and how you describe them. I’m an Aesthetician and Aromatherapist. I’ve never ordered anything from you before because your prices are higher than what I usually pay but I have often thought about it! I buy over 50 different oils from a variety of companies for use in my skin and body care line and for personal use. Is the price point of your line due to the increased cost you pay or do you charge what you feel the market will bear? I know my line is a mixture of both. Regardless, I want to tell you that I do enjoy what you’ve put together and I wish you well. Best wishes for continued success!

Sincerely,
Sonsa Rae
www.sonsaraeskincare.com

The "charge what the market will bear" made me laugh... here's my reply:

"laughing! that is the most upfront question I've ever seen!

now... mostly... my prices are dependant upon my costs. I could spend a LOT less than I do for many of the oils I offer... I import most of them myself, and between the value of the dollar nosediving this last year, and the costs of shipping escalating.... I've had products that I imported in '07 and '08... the producer did NOT raise his price...but by the time we did the currency exchange and the freight, my actual cost was 40 -50% higher.

I keep my markup as low as I can on some of the 'rare and special' oils...there are some that... last year I HAD to charge...let's say $50 for 15 ml. This year got a BAHGAIN... and *could* offer it for $30.. I will probably cut the price to $35-$40 ... giving my clients a break, but making more than I normally would. but that's rare.

and I have a HUGE investment in inventory. I don't know of ANY small supplier who imports as much Corsican Helichrysum as I do... but it's one oil that I refuse to run out of..we use it in a lot of our blends, etc.

Primarily, our prices are based on our costs... and I really do try to buy the *best*... not saying I always succeed. But in buying the oils, and in upgrading computers (just those two areas!) every time I have made a decision based on cost...I have lived to regret it. So now, I bite the bullet and spend the money. Unlike a few people in this industry, I am not getting rich. But I have to make enough that we can keep on doing what we do...otherwise we'd all have to go get real jobs! ;)

Thanks for asking."

And as follow up to that message, because of changing conditions... yesterday and today we were able to lower both our bulk and our retail prices for SeaBuckthorn Berry CO2 extract by 16 or 17%, and our new shipment of Vanilla CO2 extracted is priced at less than HALF the cost of our prior stock. (15 mls went from $125 to $60!)

And our newly reformulated Spring Equinox Blend will retail for 2/3's the cost of its predecessor.