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Is the cosmetics really more expensive, the better?
Oct 12, 2018

1. Where is your money and skin care?


(1) Brand. It is not the price of the product itself that determines the price of the cosmetics, but the brand itself. Therefore, advertising investment in building a brand is very important for skin care products.


Let's take the L'Oreal Group as an example to see how the money of the cosmetics company is spent and how it is earned.


We can see that:


1. The gross profit margin of L'Oreal Group's products is 71.1%. Here, the gross profit margin is calculated as: (sales - cost of sales) / sales.


2, the most cost is advertising and promotion costs, reaching 29.1%, and the related channels, administrative and other administrative expenses are also as high as 21.4%. These two items add up to 50.5% of the cost.


3. R&D expenses are 3.4%. This is already a very high investment in R&D. There are not a few cosmetic companies that can exceed this input ratio, not to mention domestic cosmetics companies.


It can be seen that most of the expenses are contributed to marketing and channels, accounting for 50.5% of the price.


(2) The product itself: We look at the product itself. In fact, this part of the cost is included in the cost of sales, where the cost of sales accounts for 28.9%. Because the cost of sales here includes the cost of raw materials, packaging materials, manufacturing, logistics and transportation. What matters to us is only the raw materials for packaging materials and cosmetics. Except for production and logistics costs, the cost of raw materials is lower in the cost of sales.


And the products that are in our hands really determine the use of the products, that is, the raw materials for cosmetics. But the sad fact is that we get the skin care products in our hands. In many cases, the price of packaging materials is greater than the price of the contents of the raw materials!


So, your brain fills the picture, in the 28.9% of the cost of sales, how much raw material there is.


2. Will different price levels lead to differences in ingredients?


The ratio of raw material cost to the price of the product is very small. If the gross profit margin is pursued, the control of the product cost will be very strict. That is to say, when the channel cost and promotion cost cannot be changed outside the enterprise. The best thing to do is to start from the inside and start with your own products in order to improve the gross profit. The streamlining of costs is a good choice, especially for low-end domestic products under traditional channels. Because of the fierce competition, the gross profit margin is already very low, and it is sensitive to the cost of raw material formula. It has no ability to do high-cost raw materials. .


But if it is a high-end product, the profit margin is large, there will be more money spent on the product itself, but this is more of a high-end brand abroad. From this point of view, a penny of goods is set up.


But when it is not established, even high-end brands do not necessarily mean that the cost of raw materials used will be high. What can be done with a low-price formula, why must I use it expensive? Bosses always want to earn more.


It can be said more because cosmetic companies are usually a recipe for different brands, and they can be used for different brands by changing the flavor or adding a little promotional ingredient.


According to experts, the core ingredient of Lancome's small black bottle and Paris L'Oreal black bottle is the "different yeast fermentation product lysate". Diploid yeast fermentation product lysate is a component that can strengthen the metabolism of the stratum corneum of the skin and plays a role in cell repair. It is ranked second in both ingredients, which means that the content is not low.


The humectants that are more familiar to everyone, such as sodium hyaluronate and other active ingredients, are available in both products, but they are arranged before and after. That is, in order to adjust the sense of use or to match the effects of other components, the amount is adjusted.


3, different ingredients will lead to differences in skin care products?


meeting. What ultimately leads to a difference in skin care products is the difference in ingredients (and technology). Because the technology used by each company is different, and the products you need for your skin are different, you will have the most suitable cosmetics in different brands. For example, some people say that niacinamide whitening is good, but some people use it without any feeling or irritating. Some people use VC whitening, the effect is very good, but other people say that there is no effect can not love. Therefore, the ingredients in the formula and the techniques and processes used are the determining factors in the skin care effect.


Even if the raw materials look the same, but the amount of raw materials is different, it will bring some differences to the products. Therefore, from the raw material list, the two cannot be completely equal. Experts also said that although the two will not open too much gap in the cost of raw materials, it is understandable that the difference between the two products is inevitable.


Therefore, cosmetics are not as expensive as possible. When using skin care products, you should be good at summing up the ingredients that suit you, rather than being kidnapped by the brand and paying for the brand's expensive advertising costs.


1, the same company at different price points of skin care products, the technology, even the formula may be the same. Therefore, it cannot be said that the higher the price, the more effective the product is, and it is judged by looking at the ingredient list.


2, different companies of different price of skin care products, usually a little more expensive materials, but not absolute, because the big brands use ordinary raw materials to sell high prices is too much.


3, the decision to skin care effect is not the level of cosmetics, but the functional ingredients and the formulation technology used, and the degree of matching of the product with your skin and environment.


Hangzhou Fuyang Sunshine Imp.&Exp. co., LTD.


Website:www.fysunshine.com


Email:ss1@fysunshine.com


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