Friday, February 20, 2009

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.

6 comments:

Donna Maria @ Indie Beauty said...

Great post Marge! Quality is important no matter what your business and your commitment to it and transparency about it are evident by how you responded to your customer. And you're right, who could have enough of that wonder helichrysum oil around?

Karen Mead said...

Marge, thank you for being so upfront
about the reality of costs.
I blend custom oils as well (but on a MUCH smaller basis) and I could not love what I do if I did not use the best possible oils I can find.
Yours are amazing and I so respect your intent to stay true to what you believe it.
You are my role model!

Nancy in Santa Fe said...

I've always found your prices to be quite reasonable compared with those of that large company that uses multilevel marketing. Although their oils are excellent, their prices are astronomical. I love your quality, variety, and prices. I also trust your integrity, so I know when prices go up or seem high it's because your costs are up as well. Thank you for your excellent service.

Leigh Pickering said...

Marge;
I've been in business for 20 years and I have exactly the same take on conducting business - I need to make a living; but I couldn't live with myself if was unfair to others. You get what you pay for. Be honest and customers will respect you and refer you.
Personally, I've never advertised my business and have no phone listing, yet I've never been short of work. But apparently a sound business philosophy and a good product is what customers really want.
The bonus is you can put food on the table,tolerate your boss and have respect and self-respect at the same time - and do good for the world! What more could you want? Thanks for a lovely company!

Marge said...

Thank you all... I'm catching up on comments tonight... and just wanted to thank you.

I'm remembering my first Reiki Master... who used to get criticized for charging $$$ for her gift.

"But if I can't pay the rent I'll have to go be a word processor or secretary somewhere and then there'd be no healing for anyone."

Made perfect sense to me!

Sonsa Rae said...

I forgot all about asking this question a year ago! I hope it wasn't offensive; I was honestly curious as to the price point. I have seen so many different price points for essential oils, since I first started my biz ten years ago, it really made me wonder what the difference is. Thank you for clarifying this Marge.