Why are perfumes so expensive ?
Let’s be honest, purchasing a perfume can be outside the budget. But, how can we explain the price of a perfume ?
It is the birthday of a loved one and you are running low on gift idea. A nice perfume could be a smart choice, yet, when prices are often higher than 100 bucks, it is better to think twice.
Might the price of the fragrance be the ideal culprit for a perfume price ?
First of all, for a brand, the challenge implying the launching a perfume is risky. For example, Lancôme spends an average 6 years of testing and developing before releasing a new perfume. The process is already costly, but afterwards, a brand also need to materialize it.
Case n° 1 : How about fragrance made of raw materials ?
The fragrance itself and more precisely raw material could be the main culprit… Let’s investigate the manufacturing process. To get their smell, raw materials must first be harvested.
If 90% of raw materials come from the distillation process (a very costly process by the way), their prices depend on their scarcity or the conditions in which they have to be harvested. Some more flicky raw materials, as the Centifolia Rose, have to be collected by hand. But then, the perfume also needs to be extracted from these delicate materials which some cases require a costly cold enfleurage. To give an idea, 1L of Centifolia Rose Absolute represents between 10 and 12 thousand euros per kilo. And it's not the only one that is prohibitively expense ! Iris or oud must undergo several years of conditioning before you can extract their essence. Rest assured, there are only a few such luxurious materials and only a few milligrams are used in a end product: this concentrate is diluted with alcohol and water to create the perfume you will wear.
The concentration of this concentrate can result in many types of fragrance :
- Eau de Cologne : less than 7% of aromatic compounds
- Eau de Toilette : between 7 and 12% of aromatic coumpounds
- Eau de Parfum : between 12 and 20% of aromatic compounds
- Perfume, Extrait or Absolu de Parfum : between 20 to 40% aromatic compounds
These concentration differences can impact the price of your perfume, but not as much as we think : for a 100€ natural perfume, the fragrance only represents 10€ of the overall price.
However, today, most of the perfumes are made of synthetic molecules ! Perhaps the high price is explained by this use.
Case n°2 : What if the fragrance is made of synthetic molecules ?
Perfumer since 1975 and master perfumer since 2006, Olivier Cresp stated :
"There are 1000 natural raw materials (from nature ) and 500 molecules (i.e. what nature can not give us). That said, some molecules sometimes cost more than certain natural raw materials !"
Fortuitously for perfumers and unfortunately for our investigation, synthetic molecules are generally less expensive than raw materials.
If the naturalness evokes in you a real sympathy, then we are obliged to inform you of the other side of the coin that this natural trend implies.
Although everything natural has a golden reputation, the reality is sometimes quite different. Natural vanilla, for example, is very costly and comes from underdeveloped countries where working conditions, security et wages are not the best. Meanwhile, laboratories created the vanillin molecule from cloves whose vanilla scent would deceive the most experimented one. Cheaper and with a smaller carbon footprint, why not replacing the natural molecule with the lab-grown one ? The pro/con balance seems lopsided...
For a 100€ synthetic perfume, the fragrance only represents between 1 and 4% of the overall price.
What if marketing was the new culprit ?
With such a small impact on the overall price of a perfume bottle, the material concentrate alone is not responsible for your empty pockets. This lead to the following investigation : marketing.
Added to the price of the fragrance (€2), you will have the design, the making of the bottle and the packaging (€3).
Advertising and marketing should not be forgotten as they constitute for no less than 25€ of the price.
And while the staggering discrepancy between the cost of marketing and the cost of the fragrance may surprise you, the explanation stands out as a sore thumb regarding the amount of money a star receive. As an example, Natalie Portman have been paid 28 million euros by Dior for a 3-year advertising campaign and Brad Pitt with CHANEL, have pocketed 7 million for a single TV spot. With such an investment in marketing, we quickly understand the high price of perfume.
Why do brands pay movie stars millions to sell perfume ?
The first instinctive response would be to say “I would rather pay less for a perfume and not see movie stars at the TV ». Nonetheless, if advertising agencies are so generous with their faces, it means this strategy is paying off.
As a matter of fact, consumer behavior seems more like a way to identify to a brand than to have a perfume. Perfume is said to give "An access to luxury brands which inspire dreams" For Delphine Dion, teacher at the Essec Business School : "Purchasing Dior J’adore, is above all buying Dior, it is a way of buying a part of these luxury brand one could not afford ".
On the top of this, brand considered as “luxury brand” with more money, will be better marketed and promoted. In fine, consumers are more accustomed to them and, so, more likely to buy from them. Thus, marketing carries weight in the price of a perfume, but not enough to reach the usual €100bottle.
The perfume grey market
The term, which connotes a shadow market similar to smuggling, reflects a less clear-cut reality.
To understand the origins of the matter, it is necessary to realise that while a brand sells perfume "directly" to its customers, the overwhelming bulk of its sales are made through retailers.A brand's main business activity is therefore about selling large quantities of fragrances to retailers around the world. In most cases, the different sales teams compete with each other to boost sales.
Some distributors (typically in Latin America or Eastern Europe) then propose special agreements to the brands: rather than buying only the quantities they will be able to sell through their retail channels, they buy much larger units, so as to obtain better pricing. Rather than buying 4,000 units of a perfume at €35.00 each, for example, they offer to buy 40,000 units at €25.00 each! Since the salesperson is mainly concerned and focused on his or her own performance, they have everything to gain by accepting the deal. The retailer sells the 4,000 units through its retail network and then sells the remaining 36,000 units to intermediaries...
Large quantities of perfumes are then stored for months in faraway countries before being resold to intermediaries who will then resell these perfumes via e-commerce platforms applying ultra-competitive pricing policies. Although some perfumes are normally sold for €80.00 and end up being sold for €45.00, one should not seek further. The article is therefore not necessarily a counterfeit; however, it must be acknowledged that these fragrances are often stored for a long time in inappropriate conditions, which may result in the adulteration of the perfume.
Why do brands still allow the grey market to exist? Well, firstly, some brands are extremely cautious and use technology to track their products in order to protect themselves from malicious resellers. On the other hand, other brands are being misled by resellers who they think are operating in a good faith but who are in fact dissimulating their reselling activity. Other companies are well aware of these grey market problems, but the sales departments of the concerned countries are not ready to lose a valuable part of their regional turnover overnight.
The long-term consequences of the grey market are rising concerns for the perfume industry. With the easily accessible price comparison website, most consumers can access in real time the most competitive prices for their perfume purchase; ost consumers can access in real time the most competitive prices for their perfume purchase; and if a retailer offers the same product (seemingly) 30 or 40% cheaper than its RRP, many consumers will decide to buy a seemingly compliant product - albeit sometimes inappropriately stored and hence already adulterated at the time of purchase - rather than the compliant item sold through the official distribution channel. As a answer to this online competition, the selective perfumeries have committed themselves to a discount race by handing over part of the loss of earnings to the brands. The brands themselves are reacting by increasing their RRPs to still make a margin. It is obvious that some of the well-known consumer brands are caught in a vicious circle that is in the long-term damaging the brand image of this sector.
Differences between niche perfumery and selective perfumery
Once it is decided that the historical brands of haute couture (or others with great means) are not the only ones to be given the right to create perfume, we assist to the rise of "niche perfumery ".
Once it is decided that the historical brands of haute couture (or others with great means) are not the only ones to be given the right to create perfume, we assist to the rise of "niche perfumery".
Frequently under-promoted (or not promoted at all) by large retailers - higher visibility on the shelves implies greater investment for the perfume house - small brands are also under greater pressure of figures from these retailers. Indeed, selecting a retail outlet is cheaper than having to pay for the premises, the salespeople, and sufficient inventory to run a shop. The investments are therefore not equal, and besides, each perfume will not be produced on the same scale. Consequently, with these small batches, the individual cost of each bottle will be much higher than in conventional perfumery ! At CHANEL, a €100 bottle will include €25 in expensive and lavish marketing, while small brands rely more on social networks or affordable communication, and thereby considerably reduce the advertising budget. "Everything goes through public relations," says Céline Verleure, who founded the perfume brand Olfactive Studio in 2011. "Everything we don't put into advertising, we put into the quality of the perfume».
The result is a bottle of perfume that is certainly expensive, but that is the price to pay for making a mockery of bland, old-fashioned, ultra-marketed perfumes. You are conscious that the fragrance would have been specifically pampered and produced by a venture that breaks away from market-driven expectations. Niche perfumery makes a strong statement about its originality and unusual fragrances.
Are quality perfumes available at a fair price?
Not willing to buy an expensive bottle? Of course not! Not everybody feels like a perfume addict. Besides, you can only afford to spend a small amount of money ? or are you afraid of your olfactory choices ? Fortunately, there are a few tips.
- On Sommelier du Parfum we can help you find the perfume that suits you and your budget.
Yeah, we are going to look after our own interests, but we have to say that we take a thorn out of your side and a certain amount of trouble for you. Thanks to our questions to learn more about you and your nose, as well as the various filters you are free to apply based on the season, on the occasion or the price you are willing to spend, you already spare yourself a lot of time and considerably reduce your chances of being disappointed.
- Duty Free - whose increasing prices seem to spare perfume - is a great way for the lucky travellers to dodge taxes. However, large retailers only give niche perfumery a very low profile...
How to choose your perfume ?
We understand. Finding a gem is not quite easy. Several parameters should be considered to help you in this journey. Let's list them in the following order:
- Get a hold perfume samples
Yes, it may sound silly, but let's face it, comparing perfumes on a cardboard lying in your pocket after returning from Sephora... A better alternative is to take a fragrance sample with you to understand how a perfume lasts on your skin.
- * Try it out calmly and thoughtfully
Before you go spraying your perfume all over the place and overloading your nostrils with hundreds of molecules, we suggest that you learn more about the steps to take.
- Analyze the durability and the desired sillage of your perfume
Indeed, depending on the notes you pick, your perfume may last more or less time, and the same goes for its trail, given the amount of alcohol in it. We leave it to you to find out here.
- Compare the diffusion of the fragrance on your skin
Perfume may differ from skin type to skin type, so be careful about how the notes evolve on your neck or skin.
- Don't rely too much on the gender of the perfume
Frequently, gendering perfume is more a marketing trick and a simple olfactory pattern driven by big brands than a real guideline. And yet, many fragrances could be suitable for all genders. Let us explain here.
Remember that Sommelier du Parfum will assist you in the choice of your perfume, making it as smooth and uncluttered as possible. You can click on the "Discover my perfume" at the top of your screen and (re) start the adventure!