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  1. #1
    Dependent Akahina's Avatar
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    Question Fragrance price increases: Why, and are they reasonable or just greed?

    Dior is just one house that continues to raise prices way, way beyond inflation. Why are they (and others) doing this? Is it because they know we will buy them? Do they want their prices to be at unreasonable levels like (insert any expensive house name here) to promote the idea of exclusivity? Do they know they will sell less but still make the same profit with fewer bottles sold? Are the ingredients becoming radically more expensive? Or is it just pure unadulterated greed? It does not matter that much to me because I have a nice collection that will last a lifetime, but the chances of me buying many fragrances in the future is pretty slim even though there are a couple of uber-expensive items I want. Discuss...
    My Favorites

    1. Amouage Epic man
    2. Dior Leather Oud
    3. Perris Monte Carlo Oud Imperial Black
    4. Le Labo Patchouli 24
    5. Amouage Opus VII
    6. Byredo Bullion
    7. Norma Kamali Incense



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  2. #2

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Doesn't really matter to me what the reason.

    I am a huge lover of the free market capitalist system. If they want to raise their prices, then consumers have a decision to make. The company makes a decision to raise prices knowing the possibility of reduced sales. It is their job - it is their OBLIGATION - to maximize profits. The best way to maximize profit is to make a damn good product that people are willing to buy, and charge the price which optimizes profits based on price/sales estimates (i.e. supply/demand). Or you could live in a socialist society and wait in line for bread at the price that the central planners deem appropriate.
    Seasonal favorites:

    1. Creed - Spice & Wood
    2. Creed - Aventus
    3. Dior - Vetiver
    4.
    by Kilian - Straight to Heaven
    5. by Kilian - Cruel Intentions
    6. Puredistance - Black
    7. Tom Ford - Plum Japonais
    8. Neela Vermeire - Trayee
    9. Creed - Royal Oud
    10. Chanel - Egoiste

  3. #3
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    CapriDog's Avatar
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    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    As a consumer, my guess is greed. The price will continue to increase as long as the targeted buyers can afford it. There will be a threshold where price will stay flat for a while but I am not entire sure which deciding factors impact the threshold. Given the bad economy, fragrance price has continued to increase (but I guess with a slower rate) probably because the targeted consumers were not badly impacted. My GF and I were in a Coach store in Seattle last year and saw a group of about 20 tourists pouring into the store. They bought stuff left and right without really looking at the price tags. So to them, stuff were not expensive it's just that I could not afford it.
    Last edited by CapriDog; 18th March 2014 at 11:08 PM.

  4. #4

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Edit: As I type on my phone I see 2 others giving sinilar responses.

    There is really no such thing as greed in an individual business model. It is called the profit maximization rule, and that's a formal concept in economics. There are obviously a lot of variables at play including capital, production cost, and market share/ marketing headspace but in general if a company can expect to sell 1000 bottles of fragrance at $200 versus 1500 bottles of fragrance at only $110, they will choose the $200 price point as it results in greater gross (and profit) ($200,000 versus $165,000).

    Unless the price increase completely obliterates company image and alienates people from purchasing their product (eg ruins sales) the fragrance house could care less if fewer people purchase and are able to enjoy the fragrance if the end result is more (maximized) profit.
    Last edited by Jridgen; 18th March 2014 at 07:03 PM.
    Current favorites_____Black Tourmaline_____Gucci Pour Homme II_____Memoir Man_____Tuscan Leather______Montale Aoud and Pine_____Sel Marin_____Invasion Barbare_____Tonka Imperial____Dior Homme Intense_____L'Humaniste____Santal 33_____Bois d'Argent_____Nio_____MFK Oud_____Lumiere Noire_____Bois d'Encens_____Cuir Ottoman

  5. #5

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Quote Originally Posted by dougczar View Post
    Doesn't really matter to me what the reason.

    I am a huge lover of the free market capitalist system. If they want to raise their prices, then consumers have a decision to make. The company makes a decision to raise prices knowing the possibility of reduced sales. It is their job - it is their OBLIGATION - to maximize profits. The best way to maximize profit is to make a damn good product that people are willing to buy, and charge the price which optimizes profits based on price/sales estimates (i.e. supply/demand). Or you could live in a socialist society and wait in line for bread at the price that the central planners deem appropriate.
    That's not exactly true. A 'free market capitalist system' does not exist in any part of the world in the real definition of the term/idea. Furthermore, depending on how you define 'a free market capitalist system', the idea(s) behind the creation of various businesses/corporations has usually depended on when and where they were started. Many were begun by aristocrats who couldn't make money off land in the form of rents and needed another way to survive or were simply interested in pursuing interests aside from living off the land they owned. Those in the newly emerging 'middle class' wanted to join the aristocratic class and after creating a successful business venture, they would sell it and retire to the countryside as soon as they made enough money (usually investing some in land and living off the rents). Profit, and the maximization of profits, has not always been the end all for businesses/corporations, that's simply a modern justification for seeking short-term gains while conveniently forgetting about the long-term.

    As for the original question, I'm sure many factors come into play, including what the 'competition' is charging.

  6. #6

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    It is just pure greed. I bet if we all found out how much they really cost and what the profit is it will be shocking.

  7. #7

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    My guess would be meeting shareholder demand. With perfumes being a luxury good, it's easy to raise the price on something that's already thoroughly over-priced.
    Madhat Scents - My personal limited run artisan perfume project.

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  8. #8
    Dependent danieq's Avatar
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    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Why does any company raise prices? To make more $$, because they can, because they want more profit. Because they are greedy. Greed is what makes capitalism work, at least in part.
    I would have despaired unless I had believed that I would see the goodness of the Lord in the land of the living.

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  9. #9
    hednic's Avatar
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    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Quote Originally Posted by dougczar View Post
    Doesn't really matter to me what the reason.

    I am a huge lover of the free market capitalist system. If they want to raise their prices, then consumers have a decision to make. The company makes a decision to raise prices knowing the possibility of reduced sales. It is their job - it is their OBLIGATION - to maximize profits. The best way to maximize profit is to make a damn good product that people are willing to buy, and charge the price which optimizes profits based on price/sales estimates
    Agree with this thought.
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  10. #10
    Dependent Akahina's Avatar
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    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Another business model would be to grow the business and thereby increase profits. Henry Ford was a capitolist but wanted his workers to be able to afford what they made and Ford thrives today. Dusenberg made fantastic cars at fantastic prices that are highly collectible today, but the company no longer exists. As a capitolist myself and a former business owner, there is a center road to take where both profit and expanding busiess seems like the most prudet model.
    My Favorites

    1. Amouage Epic man
    2. Dior Leather Oud
    3. Perris Monte Carlo Oud Imperial Black
    4. Le Labo Patchouli 24
    5. Amouage Opus VII
    6. Byredo Bullion
    7. Norma Kamali Incense



    Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind.


    The IFRA can bite me!

  11. #11
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    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Isn't the cost of everything going up? I just bought a $7 box of frosted flakes, I'm paying $3.84 a gallon in gas and the subway fare in NYC goes up every year. So do I think these companies are any more greedy than they were 50 years ago? No I do not. This is the way our global economy is going. So I see my favorite fragrance house raising prices, ok, it's their ball so to speak, they can do whatever they want. I have to disagree with Jridgen though. There's no way a company will keep 66% of their sales if prices increase by 45% lol. In fact, if you're the kind of consumer (like myself) that usually purchases more than one item at a time, you might take your money elsewhere when faced with a price increase

  12. #12

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Most likely- as shown by BN statistics in various threads, still need to look them up- only a tiny fraction of the price is represented by actual production costs, so more net profit for the fragrance houses.

  13. #13

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Greed of course!

  14. #14

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Especially Greed's Aventus

  15. #15

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    Fragrance industry has the best profit margin you can encounter in the market. Production costs are way less that what they want us to think and they set the price according to the positioning (the branding, how high they aim with their products) they want to get and how much people is willing to pay for a supposedly luxury product.

    Some fragrances are sold at 300$ and they could easily be sold for 100$ and still make some profit, but... do Creed, Malle, Amouage,etc. want to be seen as affordable brands?
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  16. #16

    Default Re: Fragrance price increases: Why, and are they reasonable or just greed?

    They have 3 options mainly i believe.

    Increase prices for the same fragrance, reformulate the fragrance with cheaper materials, or discontinue the fragrance. Price of food and gas is also going up, 2L of juice now is 1.75L for the same price, they blame it on global warming and drought conditions, inflation and the list goes on.

    I thought that the attempt to slowly perish the middle class was only a myth.

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