It has been our experience that resellers who do not mark up too aggressively are more successful than those who mark their prices up too much. A golden rule about reselling is to sell a product for what it is worth.
What is overpricing?
The definition of overpricing can be described as selling a product at a higher price than the value of the product or setting a price that’s higher than what the market is willing to pay for it or selling a product for more than what its worth.
Generally, there is a link between overpricing a product and low sales volumes, and therefore it is not a commonly recommended pricing strategy. Its important for any company to invest time and resources to determine the optimal price for a product to maximize revenues and therefore we have recommended selling prices listed on the products in our catalogue. Our cost prices are in black text and our recommended selling prices are in red and blue text next to each product based on what the quality of the perfume is that you purchased for reselling.
To determine the value of a product, the products pricing position and pricing segment would first need to be determined.
What is the meaning of Eau in front of perfume concentrations?
As soon as perfume oils are mixed with a solvent like alcohol it will then have Eau added to inform the wearer of the strength of the oils in it. If no alcohol or solvent is added it will simply be labeled as Parfum. Arabian oils are known to be sold in Parfum or pure oil format with no alcohol added to it and are generally very expensive due to it’s undiluted nature.
Very few fragrances houses manufacture Parfum. Chanel No 5 is one of the few fragances to be sold in four strengths which is Parfum, Eau de Parfum, Eau De Toilette and Eau De Cologne.
Although we sell copies of the original fragrances below we have actual examples of the exact same fragrance with the only difference being the quality and selling price and at times the mls. You will notice from the below examples that the fragrances come in different strengths for example Eau de Parfum and Eau De Toilette. The smell or fragrance remains the same but the quality or strength is different which means that the perfume with the higher concentration of perfume oils will be more expensive to manufacture and can therefore be sold at a higher price.
Eau De Parfum retail selling price of +-R180 per mini travel size 5ml
Eau De Toilette retail selling price of +-R600 per 50ml
Eau de Parfum in 50ml or 100ml is not available in South Africa so a price comparison here is more difficult.
Eau De Parfum retail selling price of +-R1400 per 50ml
Eau De Toilette retail selling price of +-R900 per 100ml
Eau De Parfum retail selling price of +-R1600 per 110ml
Eau De Toilette retail selling price of +-R1300 per 110ml
Eau De Cologne retail selling price of +-R700 per 110ml
Aftershave retail selling price of +-R500 per 110ml
In essence, you can’t purchase a product for R65 and resell it for R200. This would be a markup of 208% which is extremely excessive. On the other hand, selling our Eau De Parfum 30% oil range at R200, is a fair selling price since it’s a product of a more superior nature. In the right demographic, like a small country town with no competition, you could probably sell the Eau De Parfum 17% oil perfume at a higher than recommended selling price of R160 as you would have no competition but in an urban area this sort of markup will be a sure fire way to kill repeat sales and customers.
If you still have not made a decision on which perfume concentration you will purchase for reselling then here is some tips to help you decide.
1. Who is your target market? Is it established 30 somethings with a steady income or is it students or teenagers?
2. Are you planning on selling perfume to high income clients or middle income clients?
3. Do your customers believe in spoiling themselves with an expensive bottle of perfume or are they more practical and splurging on themselves is of less importance and they would gladly settle for a less expensive version of their favourite perfume.
4. Are there lots of competition in your area? If yes, what will you be offering that makes your perfume brand different to your competitors perfume brand?
5. Based on the answers to these questions you will be able to determine which strength you will be purchasing. Some of our existing customers do however purchase both the 30% and 17% oil range as they service a broader area and are exposed to a broader demographic of potential customers.
Although we have customers who swear by the 30% oil fragrances we also have customers who swear by the 17% oil range as well. Some of our clients have used both concentrations and report that both stay on the whole day but the 30% oil range just smells stronger.
You can see our blog post on What is the difference between 17% oil and 30% oil Perfume? as well for a more in depth look at the different fragrance concentrations.