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  1. #1

    Exclamation "The price of a regular coffee. Yep, not even a cuppucino."

    Basenotes member Irina very kindly shared this link in another thread. Makes interesting reading so I am posting it as a thread title.
    This theme has come up before and (perhaps ?) some members would rather not believe it. It does rather shatter the myth surrounding a $200+ Creed or niche juice.
    Thanks Irina for sharing this.


    Behind the Spritz: What Really Goes Into a Bottle of $100 Perfume
    by Barbara Thau, May 22nd 2012 2:10PM
    Updated: May 22nd 2012 5:08PM
    PerfumesHow much does that fancy $100-a-bottle department store perfume you wear really cost to make? The answer is one of the retail industry's dirty little secrets -- with good reason. If shoppers got a whiff of the how little is spent on making "the juice," it would be like Toto pulling back the curtain in The Wizard of Oz.

    Here's the lowdown: Despite all the flamboyant marketing-speak behind prestige fragrances -- all that talk of floral formulas and gourmand notes -- the value of the actual liquid is roughly equivalent to a large cup of regular coffee. Yep, not even a cappuccino.

    And perfume is no outlier in the cosmetics department: When it comes to a host of beauty products, "There's an enormous disparity between the cost of the product and the cost to the consumer, more so than anything else," a former department store CEO told DailyFinance.

    "If you bought a laptop that costs $1,000, the laptop might cost $600 to $700 to manufacture, but if you bought a lipstick for $25, it might cost 25 cents to manufacture," he said. "The same holds true for fragrances."

    Scent Sells

    Fragrances are a big -- and growing -- business.

    From January to March alone, department store fragrances generated $501.2 million in sales, up 7% from 2011, with nearly 8.0 million units sold, according to market research firm the NPD Group.

    The ex-retail CEO offered DailyFinance a rare glimpse into the breakdown of the costs built into department store prestige fragrances, using an average $100, 3.5 ounce bottle of a "celebrity" perfume as an example. As the cost breakdown is a closely-guarded trade secret (rather like Colonel Sanders' fried chicken recipe), he would only speak on the condition of anonymity.

    PerfumeThe Breakdown

    Bottle: $6

    The perfume bottle itself is a meaningful contributor to the cost of the fragrance, especially as some bottles are veritable sculptures, expensively designed by commissioned artists, the CEO said. Indeed, perfume bottles have a noble history as objets d'art -- to the point that they have been the subject of museum exhibitions.

    Packaging: $4

    Typically, this includes the bottle's package, as well as collateral material for the department store counter, such as testers and displays "that are all part of an integrated presentation scheme," said the CEO.

    Marketing: $8

    All the legerdemain that goes into creating a perfume's mystique, particularly for a celebrity-backed fragrance, carries a heavy price tag. The marketing-magic machine includes everything from department store marketing at the point of sale to the media blitz: "scent strips in magazines, outdoor ads on billboards and bus shelters, and TV advertising," the CEO said.

    While the retailer and supplier typically split the cost of TV spots, all the other marketing costs are usually paid by the manufacturer.

    But when marketing a fragrance -- as opposed to fashion or accessories -- seeing isn't always believing, Karen Grant, vice president and senior global industry analyst for the NPD Group, tells DailyFinance.

    A shopper might instantly respond to the aesthetics of a handbag she sees in the store or in an ad, for example, which can prompt a sale. But before they'll be convinced to make a perfume purchase, consumers must "encounter the scent" via promotional ploys like testers or scent strips in magazines. And all those things jack up marketing costs, she said.

    Sales Commission: $6

    The sales people at department store beauty counters work on commission, which also figures into the price of the fragrances they sell. Typically, they are paid by the beauty supplier, as opposed to the retailer.

    Licensing Fee: $4

    When a perfume is a celebrity label, and so many of them are these days, the star gets a royalty for the use of their name, likeness and participation in promoting the product.

    IFFManufacturer's Overhead: $15

    A big chunk of the perfume price goes toward the manufacturer's corporate overhead -- everything from the salary of the brand's CEO to corporate office expenses. And of course, paying for the chemists who produce the scent is factored in as well, the CEO said.

    In the case of a celebrity fragrance, the star or product development gurus articulate their concept. Then companies like International Flavor and Fragrances and Givaudan, often working on contract for the fragrance manufacturer, produce scents based on that input, which then go through a selection process.

    The journey from concept to final fragrance is not unlike how a food manufacturer settles on "a recipe for chicken soup," the CEO said.

    Manufacturer Profit: $15

    This figure is an estimate of what the retailer profits from the fragrance. (Not bad.)

    Retailer's Corporate Overhead: $25

    This is the same as the manufacturer's corporate overhead, excluding the cost of the chemist.

    Retailer's Profit: $15

    The is the profit the store generates from the perfume after corporate expenses. (Also not bad.)

    And Finally ... The Juice: $2

    The actual liquid concentrate, which includes a mixture of distilled water, alcohol and flavorants, is the least valuable part of that bottle of celebrity perfume.

    And while the mixture of exotic flavorants can be expensive, "it's introduced in very small concentrations by the brewmeister who created the scent," the CEO said.

    1 of 11
    view fullscreen
    Photo: Chanel
    Women's Top Fragrances

    Chanel

    Coco Mademoiselle


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    2 of 11
    view fullscreen
    Photo: Dolce & Gabbana
    Women's Top Fragrances

    Dolce & Gabbana

    Light Blue


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    3 of 11
    view fullscreen
    Photo: Estée Lauder
    Women's Top Fragrances

    Estée Lauder

    Beautiful


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    4 of 11
    view fullscreen
    Photo: Chanel
    Women's Top Fragrances

    Chanel No. 5


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    5 of 11
    view fullscreen
    Photo: Donna Karan
    Women's Top Fragrances

    Donna Karan

    Cashmere Mist, Bath & Body


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    6 of 11
    view fullscreen
    Photo: Gio
    Men's Top Fragrances

    Giorgio Armani

    Acqua Di Gio Pour Homme


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    7 of 11
    view fullscreen
    Men's Top Fragrances

    Chanel

    Bleu De Chanel


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    8 of 11
    view fullscreen
    Photo: Gucci
    Men's Top Fragrances

    Gucci

    Guilty Homme


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    9 of 11
    view fullscreen
    Photo: Armani
    Men's Top Fragrances

    Armani

    Code


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
    10 of 11
    view fullscreen
    Photo: Light Blue
    Men's Top Fragrances

    Dolce & Gabbana

    Light Blue Pour Homme


    Courtesy of the NPD Group

    Top Fragrances are Based on Dollar Volume Sales
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    41 Comments
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    christinasuzu@yahoo.com

    Barbara this is another grat blog from you. Like it and love you.
    June 12 2012 at 4:54 AM
    Connie Pitts

    http://www.getawhiffofthis.com DON'T use perfume -- it's deleterious to human health
    May 31 2012 at 3:18 PM
    Connie Pitts

    Perfumes contain many harmful chemicals, capable of causing asthma, cancers, neurological diseases, and heart disease. It's big money for the industry, so celebrities are paid a lot of money to use their name.
    May 31 2012 at 3:17 PM
    Connie Pitts

    Perfumes are falsely advertised poisonous gasses. Please read http://www.getawhiffofthis.com
    May 31 2012 at 3:16 PM
    Raymond Matts

    Barbara, you have generalized and sensationalized with many inaccuracies. Your costs are off by a long shot in many circumstances! We also do a lot more than " Like Toto Pulling Back The Curtain".
    What I don't understand is some of the comments thinking that Natural is better than Synthetic. In perfumery we need both to create beauty. All natural is not safer, better or always more expensive.
    If anything this article confirms that as an industry there is a lack of understanding and education. When you have a signature fragrance that smells like nothing else. I can tell you that a tremendous amount of craft, expertise, blood, sweat and guts went into doing.
    I know, I live it everyday!
    Secondly, this is no different that any product on the market.... do you know how much the cotton is for your $200 pair of jeans, what the cost of a LV bag is too make, how much a pair of Tod's shoes cost to make. I think everyone would be surprised.
    Intellectual creativity is not cheap nor should it be, now if you think celebrity scents are over priced and the substance lacking... then there is a simple solution... don't buy!
    I will admit Americans are lacking in an understanding of what is quality when it comes to their taste in fragrances at times.
    May 29 2012 at 4:45 PM
    Reet

    Yet another short-sighted story by an author that is only an outsider looking in. Regardless of the cost of manufacture, there is a price for time, effort and expertise that gets you to the point where it can be actually packaged and marketed to the heard. A visual artist sells a painting for thousands to an appreciative and excited buyer - does the buyer think about the production costs? No. Not that all perfumes or art falls into the example, but there is a great deal of thought, creativity and craft that goes into it...and if the buyer is considering the retail mark-up relative to production costs, then they should stick to Ivory soap and a pencil drawing.
    May 23 2012 at 3:59 PM +1
    1 reply to Reet's comment
    Dirk

    EVERY bit of what you're talking about is in the article.
    May 24 2012 at 9:05 AM
    2 replies to Dirk's comment
    Leonidas

    While this is a fascinating look into the fragrance industry, tarring all fragrances with the same brush seems very shortsighted indeed. I have a very hard time believing that the liquid in a bottle of Serge Lutens, for instance, is worth the same amount as the liquid in a bottle of CK, Diesel, or whatever "celebrity" fragrance is currently the rage (I'm sure all this "fresh" and "aquatic" crap that's so popular nowadays is especially cheap compared to real perfume).
    May 29 2012 at 4:47 PM +1
    Raymond Matts

    Really Dirk... where? I didn't see anything about mentioning our craft as an art!
    As for this CEO... he wouldn't know unless he was involved in the process.
    May 29 2012 at 4:48 PM
    mesager42

    I stopped buying perfumes in department stores after I discovered the fragrances made in Hawaii using real oils from real flowers and not the fake chemical stuff that sort of smells like something.

    A bottle of Edward Bell's oil-based perfumes like Hawaiian Nights, Maui Rain, Kona Rain, and others are well worth their price. They are real perfumes whose scents last until you shower it off. A couple of drops go a long long way. The bottles that hold the perfume protect the oils from being degraded by light. They are real perfumes.

    Royal Hawaiian's spray on colognes of plumeria, white ginger, and pikake (jasmine) sell for about $20 in the islands - more online if one includes shipping. It's plumeria fragrance sells out on Oahu every Mother's Day. It is the main flower used in making leis.

    The only celebrity perfume that is carried is an Edward Bell perfume called Love Me Tender and it is named in honor of Elvis Presley and how he held a charity concert that helped bring in more money for the schools in Hawaii. It is just as wonderful as the rest of the Edward Bell perfume line.

    Once you have bought and worn Hawaiian perfumes and colognes, the celebrity colognes made and sold on the mainland 48 are like splashing booze on yourself before going out.
    May 23 2012 at 3:19 PM
    1 reply to mesager42's comment
    Raymond Matts

    To wear a straight oil is very unsafe! Alcohol is merely a carrier for the oil as the alcohol evaporates. Given the perfumers ability, the proper percentage allows the beauty of the notes to perform properly. Something that a straight oil can not do. Alcohol enables a fragrance to breath and a lower concentration does not diminish the value. Part of the value is in the structure of the fragrance!
    If you enjoy Edward Bells fragrances, then this is great that you have found something for you. However, fragrances are subjective and you should not assume that fragrances in department stores are not using real oils. I can tell you that in many instances they are using a higher quality than Edward is. As a small perfumer he would not have access to the best ingredients. It is unfortunate but true.... There are many different grades of the same note.
    If he was using the highest of quality, you would not be able to afford his work. This is the untold truth!
    Now I will be the first to agree there is a lack of quality and creativity in department stores at the moment. However, it is going to allow people like myself to introduce quality once again with modernity!
    May 29 2012 at 5:12 PM
    1 reply to Raymond Matts's comment
    Dave

    "To wear a straight oil is very unsafe" is BS. Tell that to the millions of people who do so everyday. As someone who says they are "from the industry", this seems very uneducated. There are many, many companies who sell mukhallats and attars that are worn without dilution!

    I prefer to wear all-natural pure oils. You can stick with your synthetic aromachemicals, that is fine, but to disparage and lie about naturals is ridiculous. It is true some people will be allergic to some naturals, but aromachemicals can cause far greater issues, such as chemical sensitivities and many other health issues. There are a lot of people who cannot tolerate aromachemicals in general, such as rwilliamhoward below... naturals don't cause these kinds of issues.
    June 01 2012 at 11:52 AM
    rwilliamhoward

    I'd as soon smell a bad case of BO than most perfumes. They give me a sore throat or plug up my nose.
    May 23 2012 at 3:19 PM +1
    brodieandscooter

    just another ripoff -----why dont the feds clamp down on these crooks,but really all it would take is that consumers refrain from buying for a month or so --and you will see the price drop a bunch --be like me ''DONT BUT THEM-- but please make sure your ;HYGENE'' IS DONE DAILY --
    May 23 2012 at 2:34 PM -1
    SHELDON

    Realy no different from a bottle of booze.
    May 23 2012 at 2:10 PM
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    Last edited by david; 19th March 2013 at 10:01 PM.
    " Only wimps swim with the current "

  2. #2

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    There was an item in the Channel 4 programme 'Superscrimpers' here last night, much of which I didn't really watch, where recognised scents & chain store own brand cheapos were compared - firstly by an expert, secondly by blind tests on the public.
    The Aldi one came out as the best value, maybe, with an M & S one tying with a D & G one.
    Or similar.

    Support for your theory, David

  3. #3

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Exclusive fragrance Bond no.9 "New York Oud".
    Launch Price: 300 euros ( about 400 USdollars ) /100ml
    Oud in the bottle: synthetic. Why? Because the natural one was too expensive....
    300 euros. I want to re-write it: 300 euros.
    (now on ebay: 200 euros, ok, we're getting better....)

  4. #4
    Dependent bigsteve's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Very interesting, David. Thanks bro !
    The comments are entertaining to read, also. "Perfumes are falsely advertised poisonous gasses." Wow.
    ----- People laugh at me because I'm different.... I laugh at them because they're all the same -----

  5. #5
    hednic's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Interesting article

  6. #6

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Note to everyone....my attempt at trying to paste the original article which appeared in the Daily Finance has gone horribly wrong. All the photo's are missing and just the bare text has come out, along with a whole trail of readers comments, (lol !)
    Don't know what went wrong. Perhaps someone can kindly paste the article how it should be ? !! Thanks.
    " Only wimps swim with the current "

  7. #7

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."


  8. #8

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by Andrè Moreau View Post
    Exclusive fragrance Bond no.9 "New York Oud".
    Launch Price: 300 euros ( about 400 USdollars ) /100ml
    Oud in the bottle: synthetic. Why? Because the natural one was too expensive....
    300 euros. I want to re-write it: 300 euros.
    (now on ebay: 200 euros, ok, we're getting better....)
    Thanks Andre. Yes it's incredible. People are wanting a dream, but buying a nightmare !!

    - - - Updated - - -

    Quote Originally Posted by lpp View Post
    THANKS LPP This is what I was trying to achieve. You are a lifesaver !!!!
    " Only wimps swim with the current "

  9. #9

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    You're welcome David ...links are dodgy things sometimes.....

  10. #10

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    That's like saying a CPU is worth pennies because it's made of sand.

  11. #11
    Basenotes Plus
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Very interesting article. A real eye opener. Thank you Andre for posting. Now I will be thinking about this all night.

  12. #12

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Further proof that perfume is art

  13. #13

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by Rüssel View Post
    Further proof that perfume is art
    Totally agree there

  14. #14

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Of course it is art. And I will pay what I have to pay. It is part of the process.

  15. #15

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Thanks for sharing this article. For some reason, I have the feeling that the cost breakdown may sound familiar to me (from this article or another), but it certainly sheds an interesting light on the fragrance industry.

  16. #16

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    At the risk of sounding negative the price of scents has to be one of the biggest rip-offs in the civilised world.

  17. #17
    Basenotes Junkie DaveStPaul's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by DanielPlainview View Post
    Of course it is art. And I will pay what I have to pay. It is part of the process.
    Hear hear!


    (Nevertheless, thanks for the link david. )

  18. #18

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by martinijo View Post
    At the risk of sounding negative the price of scents has to be one of the biggest rip-offs in the civilised world.
    What about the price of a Louis Vuitton bag, or Haute Couture dresses, or fancy shoes, or armani suits or Patek Philippe watches or other items of luxury? These are also rip offs in your definition. There is a high premium price for items of luxury in general. All these items cost a fraction of their selling prices.

  19. #19

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by martinijo View Post
    At the risk of sounding negative the price of scents has to be one of the biggest rip-offs in the civilised world.
    I agree. Do we really need all the hype and phony glamour ? I'd rather pay less, (for less bullshit) and just concentrate on the art.

    - - - Updated - - -

    Quote Originally Posted by DanielPlainview View Post
    What about the price of a Louis Vuitton bag, or Haute Couture dresses, or fancy shoes, or armani suits or Patek Philippe watches or other items of luxury? These are also rip offs in your definition. There is a high premium price for items of luxury in general. All these items cost a fraction of their selling prices.
    Yes. They are dreadful rip offs.
    Last edited by david; 23rd March 2013 at 10:04 PM.
    " Only wimps swim with the current "

  20. #20

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    I've been telling people this for years if you see past the marketing, the sexy bottle, the brand, the elaborate descriptions etc.
    It really is just alcohol and (mostly) synthetics, esp in the designer game, and on their scale of things it costs them practically nothing.

  21. #21

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Interesting article. For most of the last dozen years here, people have posted that the actual cost of making a bottle of perfume is around $5. But the article states it's $6 bottle +$2 scent = $8

    So we have been getting better value than I thought.
    Cheers,
    Renato

  22. #22

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Yup, I'd rather have decent stuff that someone thought about in a plain bottle, but that wouldn't seduce the market.
    Gimmicks are needed, or perceived to be?

  23. #23

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by david View Post
    I agree. Do we really need all the hype and phony glamour ? I'd rather pay less, (for less bullshit) and just concentrate on the art.
    I see your point. But it is more complicated than that. Without the famous stars, perfumes wouldn't sell so much and there wouldn't be economies of scale. In the case of Niche fragrances, most of the price is composed of overhead and profit for the different players in the chain, who are not replaceable or disposable. You pay not only for the juice, but also for all the other things that work around it.

    If you want to live in a world where the price of perfumes is just the sum of the price for the juice plus the profit for the artist, we would have to go back to 16th century europe, where each artisan or perfumer personally sold his perfumes to his clients. You would then buy perfumes at little stores or at fairs. Production volumes would be minimal for each artisan.

    But we now live in an overpopulated world where almost everything is done for the masses. We can't go back to "paying just for the juice".

    The only valid argument you can make is that the profits are too high for such a cheap product. But I won't get into this.

  24. #24

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by lpp View Post
    Yup, I'd rather have decent stuff that someone thought about in a plain bottle, but that wouldn't seduce the market.
    Gimmicks are needed, or perceived to be?
    Totally! the bottles are soooo needed cos thats the first thing you see on that shelf, then you smell it.
    On the flip side some bottles are tacky and disgusting and its the juice inside that matters so guess it backfires too lol.

  25. #25
    Basenotes Junkie SirNosebleed's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    I'm sure fragrance is a standard component for the business model of just about every designer house: it is the cash cow.

  26. #26

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    No doubt the cost of the fragrance actually manufactured is quite less. But the price what you pay is for the "WOW" factor that you get out of wearing a perfume which otherwise you wouldnt have got .

  27. #27

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    I was fortunate to meet a woman who worked in the fragrance industry back in the 80s (she sold me a rare test edition bottle of KL Homme), and this is one of the things she told me: “I worked in the fragrance department at Arden. I always loved this perfume [KL Homme]. This oil was very expensive for the company to buy. It was nearly $100/lb. Most of the fine fragrances today are very cheap, without the expensive natural raw materials, around $10/lb.”

  28. #28

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by SirNosebleed View Post
    I'm sure fragrance is a standard component for the business model of just about every designer house: it is the cash cow.
    There's an interesting book entitled 'Deluxe: How Luxury Lost its Lustre' by Dana Thomas. The chapter on perfumes makes clear that for many designers, the fragrances are indeed the most profitable part of the operation. No wonder so many do it!

  29. #29

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    This is a link to the scent article on Channel 4 the other day.
    If you can stand the adverts, BSP's Steve Pearce does the comparisons before the presenter encourages the public to do some blind sniffs - article starts at 09.44 and you need to be pretty dogged to get there

    http://www.youtube.com/watch?v=sqcvFjEZXEE

    Edit - You Tube link now available.
    Last edited by lpp; 20th March 2013 at 07:23 PM.

  30. #30

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by Rüssel View Post
    Further proof that perfume is art
    Well said.

  31. #31

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    That is an eye-opener.

    I once seen a person holding up a basketball jersey that was for sale in a sporting goods store in a mall.
    Retail Price: $135
    Cost to manufacture: $0.35

    Similar gouging goes on for Nike's and other running shoes.
    ... and designer clothes made in China.

  32. #32

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    always remember that famous blind test: supermarket perfume better than Chanel...

    http://www.irishexaminer.com/ireland...ic-219006.html

  33. #33

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by DanielPlainview View Post
    What about the price of a Louis Vuitton bag, or Haute Couture dresses, or fancy shoes, or armani suits or Patek Philippe watches or other items of luxury? These are also rip offs in your definition. There is a high premium price for items of luxury in general. All these items cost a fraction of their selling prices.
    Indeed. I didn't say it was the only massive rip off. I think there is a belief though, especially among those who listen to Olivier Creed that the ingredients cost a massive amount of money, a fallacy which people don't have about the raw materials of handbags etc.
    Regarding Louis Vuitton, the companies attitude disgusts me. I spent some time in Hong Kong and the Vuitton shops there would not sell to people if they didn't look like they had money.

  34. #34
    teardrop's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by lpp View Post
    There was an item in the Channel 4 programme 'Superscrimpers' here last night, much of which I didn't really watch, where recognised scents & chain store own brand cheapos were compared - firstly by an expert, secondly by blind tests on the public.
    The Aldi one came out as the best value, maybe, with an M & S one tying with a D & G one.
    Or similar.

    Support for your theory, David
    l watched that programme, & it was interesting. However, l think most of us are fully aware that we are paying for the name & a degree of exclusivity when we buy an expensive fragrance. Be honest, would you buy a fragrance from Lidl if you could afford a Chanel? l wouldn't.
    "What is this secret connection between the soul, and sea, clouds and perfumes? The soul itself appears to be sea, cloud and perfume..." - from Zorba the Greek by Nikos Kazantzakis.

  35. #35

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by martinijo View Post
    Regarding Louis Vuitton, the companies attitude disgusts me. I spent some time in Hong Kong and the Vuitton shops there would not sell to people if they didn't look like they had money.
    Oh no - they'll sell to anyone who has money. Of course if you wander into the stores and don't 'look' like you have money you will just get a chilly attitude until you pull out the wallet. The rules are pretty clear on that one

    Like many big name retail brands they are quite used to mainlanders traipsing in dragging bags on wheels behind them ready to be loaded up and trundled back across the border to sell for a healthy mark up - capitalism is alive and well in the motherland.
    Last edited by mr. reasonable; 20th March 2013 at 10:24 AM.

  36. #36

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by mr. reasonable View Post
    Oh no - they'll sell to anyone who has money. Of course if you wander into the stores and don't 'look' like you have money you will just get a chilly attitude until you pull out the wallet. The rules are pretty clear on that one

    Like many big name retail brands they are quite used to mainlanders traipsing in dragging bags on wheels behind them ready to be loaded up and trundled back across the border to sell for a healthy mark up - capitalism is alive and well in the motherland.
    Actually I was speaking from personal experience and no, they would not sell to just anyone who pulled out a wad of cash.

  37. #37

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    @ teardrop - personally, never been in a Lidl, but as a mainstream broadcast I thought that it was a good shot and it wasn't targeting B/n members.
    And label is not all imo, despite my attachment to certain attars, I am always happy to experiment

    Thanks to all concerned.
    Last edited by lpp; 20th March 2013 at 01:28 PM.

  38. #38

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    You saw this? Quel horreur! I walk past one of the flagships every day and it's busting with dodgy looking characters - LV is a bit of a joke amongst most people here, don't let it get to you

  39. #39

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by mr. reasonable View Post
    You saw this? Quel horreur! I walk past one of the flagships every day and it's busting with dodgy looking characters - LV is a bit of a joke amongst most people here, don't let it get to you
    It's 16 years since I was there so things may well have changed.
    I should probably mention that there was a bit of a racket at the time where people would buy LV stuff there then sell it in Japan at a profit, but so what? I never liked the stuff anyway...

  40. #40

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    thanx david, wonderful job!

  41. #41

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by DanielPlainview View Post
    I see your point. But it is more complicated than that. Without the famous stars, perfumes wouldn't sell so much and there wouldn't be economies of scale. In the case of Niche fragrances, most of the price is composed of overhead and profit for the different players in the chain, who are not replaceable or disposable. You pay not only for the juice, but also for all the other things that work around it.

    If you want to live in a world where the price of perfumes is just the sum of the price for the juice plus the profit for the artist, we would have to go back to 16th century europe, where each artisan or perfumer personally sold his perfumes to his clients. You would then buy perfumes at little stores or at fairs. Production volumes would be minimal for each artisan.

    But we now live in an overpopulated world where almost everything is done for the masses. We can't go back to "paying just for the juice".

    The only valid argument you can make is that the profits are too high for such a cheap product. But I won't get into this.
    This is quite true and sensible. If perfumes were really sold at their cost of manufacturing, would there be such a wide range of perfumes for us to buy? Really, I don't think so. There'll be rather little incentive for companies to go about creating new perfumes.

    Still, if we dislike the idea of a big part of a perfume's price to go to things like marketing and celebrity endorsement fees, then we should support the genuine niche houses where other costs make up such a big part of the price.

  42. #42

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    @Andrè Moreau - thanks for that link.

    & agree with Maque re. 'niche' - as they used to say here 'You pays your money & you takes your choice'....
    Last edited by lpp; 20th March 2013 at 01:46 PM.

  43. #43

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by Bigsly View Post
    I was fortunate to meet a woman who worked in the fragrance industry back in the 80s (she sold me a rare test edition bottle of KL Homme), and this is one of the things she told me: “I worked in the fragrance department at Arden. I always loved this perfume [KL Homme]. This oil was very expensive for the company to buy. It was nearly $100/lb. Most of the fine fragrances today are very cheap, without the expensive natural raw materials, around $10/lb.”
    Thanks. Makes me appreciate my two bottles of KL Homme even more.
    Cheers,
    Renato

  44. #44
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by DanielPlainview View Post
    What about the price of a Louis Vuitton bag, or Haute Couture dresses, or fancy shoes, or armani suits or Patek Philippe watches or other items of luxury? These are also rip offs in your definition. There is a high premium price for items of luxury in general. All these items cost a fraction of their selling prices.

    This same kind of topic was discussed in the female forum under most natural smelling perfume:-) i started the thread, moderators closed it for unknown reason to me:-) .....but there are people from the industry who say exactly this: its irrelevant what perfume is made of , most important is :is it good or bad.....
    So if you agree with them then no reason to question those prices, because synthetics are dirty cheap!! If they use naturals this could no way cost this cheap....so read the thread if you want to know more:-)

    But i wanted to add about watches? Do you know how much material it takes to make a watch and how many working hours? The most expencive watch is beeing made and then broken to parts 2- 3 times and they can make only 50 pieces of them per year:-) ......
    In jewelry too...yes you pay for luxury more then its worth in material....but the profit margin is not 10 000%......still even reading this will not prevent masses from buying perfume synthetics.....people also eat junk, if you offer them some naturals they may not even like it:-)

    - - - Updated - - -

    Quote Originally Posted by Rüssel View Post
    Further proof that perfume is art
    “Art is making something out of nothing and selling it.” --Frank Zappa

    - - - Updated - - -

    http://www.fragrantica.com/news/An-I...inya-4172.html


    Also whenever a perfumer can substitute a real thing by much cheaper thing he will do it:-) , meaning they will spend money only if the balance of perfume falls apart, and not to maximise the beauty:-) this goes on for many niche houses that are now the size of designers....amouage...chanle exclusifs etc:-)

  45. #45

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    U a Zappa fan too

  46. #46
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    @lpp lol:-) , i just found it very true and fits good here

    I just saw to confirm my thesis that each sense contains in itself other sense too, a film where people who are completely blind use their tongue to observe shapes and object in the world through of course some scientific special devices....hence if we can taste synthetics, or low quality food we can smell them as well

  47. #47

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    There are other industries where they make as much profit as in the perfume industry. For example the fireworks industry. If a fragrance satisfies me, makes me feel good, and I have the money for it, I will buy it. It's that simple. If it is so easy and cheap to release new fragrances, then why are the big companies playing it safe, releasing a ton of flankers on existing names?l'Homme, La Nuit de l'Homme, l'Homme Libre, Frozen Cologne,... If it is so easy and cheap to release new fragrances, then why are the big companies copying each other with the Sport fragrances? Most of the current offering is either a 1 Million clone, or a microvariation on a lemon or a woody aquatic. Those companies are either extremely greedy or they think we are idiots. Or the article is not entirely true, misinformation happens all the time in the current media.

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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Yes noone should care if you are happy with it:-) , also we can talk about what we smell and think regardless of your happiness:-)

    It is cheap to release 10 variations of the same thing...why bothering with something else if you are on the budget???

    Yes i think we are idiots paying such prices for synthetics:-)

    - - - Updated - - -

    perfumes can not be seen, they can not be status symbol as watches, jewelry , cars are..you can only smell them, so in a way i compare them with high quality food, something special to enjoy...nowdays i can enjoy air freshener as well...

    But yeah if you need it branded....why not to pay for it:-)

    Just if you want to find something really good money wont do the trick:-) , so its good to know some facts about this industry too:-)

  49. #49
    Basenotes Junkie Wheatstraw2's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    I'm very grateful for the article, David, it looks wonderful. Haven't sat down with it to digest it yet. My initial inclination is to look at it on a "cost per wear" basis. From that perspective, wearing even the most expensive perfume is practically costless. It's one of the most affordable hobbies I can think of. Compare it to playing a round of golf, or going out drinking, or going to the movies, or heating your hot tub, or insuring your Porsche. There's no comparison.

    You also have to look at it from the producer and retailer's point of view. Even if you really like a bottle of perfume, you're not likely to go in and see the retailer more than once a year. So he's got to sit there all year waiting for you to show up for the next bottle. Meanwhile, the guy who sells you coffee sees you at least five days a week. The coffee guy is turning his inventory at an incredibly high rate, and the perfume maker is growing old waiting for you to run out and come back. The perfume sellers have to pay for their real estate and air conditioning and security too, even though they have much slower-turning inventory. Same for jewelers. Same for prescription eyeglass places. Ever wonder why an eyeglass frame that costs six bucks to make retails for hundreds of dollars?

    Compare perfume to a daily Starbucks habit. Now, folks, tell me, what's expensive?

  50. #50

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Paint and canvas is cheap too. I can't understand why they lock up the Louvre at night.

    Interesting read though.

  51. #51

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Lots of people are comparing perfume to art. While I would agree with that, I think there is a huge difference between a limited edition, (1000 pieces) and a niche/designer fragrance which is clearly mass produced.
    To me, prices with huge mark ups are acceptable for rare discontinued perfumes and limited editions, but not for mass produced fragrances.
    I may be wrong here, but a reasonable quality print of the Mona Lisa probably costs around €5 to produce and sells for €20. This is still a healthy profit margin.
    Last edited by david; 23rd March 2013 at 10:27 PM.
    " Only wimps swim with the current "

  52. #52

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Good point.
    Art alone is not enough to justify the cost of mass market productions.
    But it's a cash cow, like many other things.
    Artisan, on the other hand, deserves support imo.
    Last edited by lpp; 24th March 2013 at 08:41 AM.

  53. #53

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by Ozjon701 View Post
    Paint and canvas is cheap too. I can't understand why they lock up the Louvre at night.

    Interesting read though.
    Comparing a mass produced bottle of fragrance to a work of art in the Louvre is ludicrous.

    Interesting read though.
    " Only wimps swim with the current "

  54. #54

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by david View Post
    Comparing a mass produced bottle of fragrance to a work of art in the Louvre is ludicrous.

    Interesting read though.

    You're not kidding.

  55. #55

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by david View Post
    Comparing a mass produced bottle of fragrance to a work of art in the Louvre is ludicrous.

    Interesting read though.
    Yeah ok massive stretch there. Still like many comparable products, clothes with a desirable label or expensive wine, it is no surprise that consumers are paying for massive markups, marketing and administrative costs. The majority of raw materials used are dirt cheap, and those that aren't the quantities used in your bottle of ABC are so minuscule that it hardly accounts for much.

    It is whether you think the artist merit of such products justifies the price. There obviously are enough people who think that $100 bottle of mall fragrance does tick the box. Whatever the market will bear I guess.

    And no sarcasm was intended, it was an interesting read.

  56. #56
    Basenotes Junkie Wheatstraw2's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Well, David, I read the whole thing and I realized I've been reading that article for twenty five years. Every so often, some young, eager, enterprising reporter discovers the idea of profit margin and writes up a story about how much of a scam anything with a profit margin is. And, by the way, the business just stays the same as it ever was and nothing ever changes. A number of the replies here point to very similar situations - couture (dresses are just made of fabric!), computers (sand!), lipstick (hey! there's rust in there!) Looking at commerce this way, the world would seem to take on this appearance of a corrupt place full of scams. 60 Minutes just ran a story about the impliedly evil empire at Luxottica. It was a joke of a report, in my view.

    The fragrance business is quite small, in the scheme of things and, like I said, it's an item that is infrequently purchased. It's more like the spice business (high value to weight, infrequently purchased) than it is the coffee business (commoditized, low value to weight, low value to physical volume). So you can store, say, two years worth of fragrance more easily than you can store two years worth of coffee. Still, you have to pay people for their time. You have to pay people to devote their energies to being available for your once-a-year purchase, whenever you decide that may be.

    If you bought all of your coffee for the next year on December 31st, coffee would seem expensive, too.

    I'm grateful for the diligently-assembled margin breakdown in the article but, really like all of the other articles I've read when a young reporter uncovers the "dirty little secret" of someone actually making a profit doing something - and not one of the actors involved seemed to be making outsized margins - the article looks, in my view, more naive than anything else.

    Put it this way. 7-11 sells a million cups of coffee per day. Chanel sells 2,880 bottles of No. 5 per day, or less than one half of one percent of 7-11's coffee business. Chanel, and everyone else in the fragrance business, has to make up for this astonishingly low volume by making more margin per bottle. Without that margin, no one could make a living as a perfume supplier and we wouldn't have perfume.

  57. #57

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    @ Wheatsraw2 - Thank you for an interesting and insightful perspective, one perhaps more applicable to the non-addicted scent-buyer - admittedly as was the article.

    However, it is more than likely that my annual scent bill somewhat dwarfs my annual coffee (or even vets') biils - and I have a modest collection by B/n standards (although many of these are absent from the Directory due to limited production rather than site issues).

    The choice is for each individual to make and discussing it may help us to choose wisely, even if that is on subsequent reflection.

  58. #58

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Interesting read.
    Is the juice worth the squeeze?

  59. #59
    Basenotes Member edward t's Avatar
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    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    ......still even reading this will not prevent masses from buying perfume synthetics.....people also eat junk, if you offer them some naturals they may not even like it:-)


    This is so true. I believe that they have probably have not been exposed to the difference between natural and synthetics almost to the point of being conditioned by media and advertising as to what is a "nice" scent. After wearing mostly naturals for a bit, there is something in my brain that picks as irritating when I wear synthetics now. I took some high qaulity oud oil mixes over to a buddies and had him check them out and he said "these smell like medicine, ughhh", and went to his stash and pulled out a bottle of Iso-e based cologne and said "This is what the ladies dig, here smell". And proceeded to pull the cap off and the synthetic smell hit me and I said "ughhh, uuu, that smells good!" and in my head was thinking, how could anyone wear that for hours? The funny thing is that I used to wear synthetics for hours before I realized there was a lot better.

    As for the profits, as a consumer it sucks, but as a businessman I am jealous and would not mind tapping in to that a bit!

    "This theme has come up before and (perhaps ?) some members would rather not believe it. It does rather shatter the myth surrounding a $200+ Creed or niche juice."

    There is no way that profit breakdown can apply to any fragrance that uses natural essential oils.
    Last edited by edward t; 24th March 2013 at 01:58 PM.

  60. #60

    Default Re: "The price of a regular coffee. Yep, not even a cuppucino."

    Quote Originally Posted by Ozjon701 View Post
    Yeah ok massive stretch there. Still like many comparable products, clothes with a desirable label or expensive wine, it is no surprise that consumers are paying for massive markups, marketing and administrative costs. The majority of raw materials used are dirt cheap, and those that aren't the quantities used in your bottle of ABC are so minuscule that it hardly accounts for much.

    It is whether you think the artist merit of such products justifies the price. There obviously are enough people who think that $100 bottle of mall fragrance does tick the box. Whatever the market will bear I guess.

    And no sarcasm was intended, it was an interesting read.
    Thanks for your post, and I apologise if I reacted a bit abruptly/harshly.
    I do agree with you entirely about the massive mark ups in other fields. Addidas pays local vietnamese workers $0.50 for a 12 hour day's work and sells the finished product for maybe €60 ~ €160.
    I don't think it is morally right, this trend toward global "slave labour".
    As far as fragrances go, I very rarely pay the retail price for a perfume that is in production. I am fortunate enough to have colleagues and friends in the industry and am able to get 90 percent of my fragrances in the form of testers.
    I am a huge fan and collector of discontinued fragrances. In this field I am more than willing to pay the supply and demand price, according to rarity.

    - - - Updated - - -

    Quote Originally Posted by Wheatstraw2 View Post
    Well, David, I read the whole thing and I realized I've been reading that article for twenty five years. Every so often, some young, eager, enterprising reporter discovers the idea of profit margin and writes up a story about how much of a scam anything with a profit margin is. And, by the way, the business just stays the same as it ever was and nothing ever changes. A number of the replies here point to very similar situations - couture (dresses are just made of fabric!), computers (sand!), lipstick (hey! there's rust in there!) Looking at commerce this way, the world would seem to take on this appearance of a corrupt place full of scams. 60 Minutes just ran a story about the impliedly evil empire at Luxottica. It was a joke of a report, in my view.

    The fragrance business is quite small, in the scheme of things and, like I said, it's an item that is infrequently purchased. It's more like the spice business (high value to weight, infrequently purchased) than it is the coffee business (commoditized, low value to weight, low value to physical volume). So you can store, say, two years worth of fragrance more easily than you can store two years worth of coffee. Still, you have to pay people for their time. You have to pay people to devote their energies to being available for your once-a-year purchase, whenever you decide that may be.

    If you bought all of your coffee for the next year on December 31st, coffee would seem expensive, too.

    I'm grateful for the diligently-assembled margin breakdown in the article but, really like all of the other articles I've read when a young reporter uncovers the "dirty little secret" of someone actually making a profit doing something - and not one of the actors involved seemed to be making outsized margins - the article looks, in my view, more naive than anything else.

    Put it this way. 7-11 sells a million cups of coffee per day. Chanel sells 2,880 bottles of No. 5 per day, or less than one half of one percent of 7-11's coffee business. Chanel, and everyone else in the fragrance business, has to make up for this astonishingly low volume by making more margin per bottle. Without that margin, no one could make a living as a perfume supplier and we wouldn't have perfume.
    Thanks for your post.
    Actually, the mark up on a cup of coffee is just as extreme as the mark up on a bottle of fragrance, The amount of grains required for one cup is probably less than half a cent, and the cup is sold for $2.50 (?). The poor peasant working his arse off, growing the raw material gets practically nothing. All the profit goes to the likes of Starbucks.
    Sorry, but I can't agrree with you on the issue of the fragrance business being small. The averege consumer, (not the likes of us !) probably buys only 1 or 2 bottles per year, but it's still a huge global business with billions of yearly customers.
    Trust me.....Chanel, (LVMH) are making OBSCENE profits !

    ......and as for the smaller guys like Perlier, selling their fragrances on a much smaller scale and for a retail price of $10......they're still making very healthy profits. If the whole of the fragrance industry, (including Chanel/LVMH) sold their fragrances for a retail price of $10 ~ profits would still be enormous and the fragrance industry would most certainly not collapse.
    Last edited by david; 24th March 2013 at 03:46 PM.
    " Only wimps swim with the current "

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