Bargain reports and analytics

Few euros for the scent, hundreds for the bottle. Why original perfumes cost so much?

PicodiOctober 4, 2018

Even though the bottle of perfume can cost hundreds of euros, cost of production is much much lower. Something’s not right… Read what you really pay for!

The price of perfume is something we don’t usually think about. We’re used to that the best ones don’t come cheap and, from time to time, we indulge ourselves with this fragrant pleasure. After all, we’re worth it, aren’t we?

To check what we really pay for in perfumeries, we investigated the bottle of a french perfume costing €83.50. Is this 50 ml of a fragrant liquid really worth that much? Or maybe behind this high price there are some nasty tricks of manufacturers?

What hides behind the price of perfume?

Chemicals instead of rose petals

The journey of our perfume starts in a manufactory in France. If the words ‘perfume factory’ make you think of fragrance experts, patiently mixing natural ingredients to come up with the perfect scent—well, we have to disappoint you.

Although perfume manufacturers actually like to boast about recipes consisting of carefully selected ingredients, usually jasmine collected at sunrise or roses blooming only in May are replaced with synthetic substitutes. Those, on the other hand, are ridiculously cheap, what makes the costs of mass production lower. Significantly. By spending €83.50 on the bottle, you pay only €1.5 for the actual perfume!

Packaging more expensive than the content

What’s seven times more expensive is not what pleases your nose but your eyes—the packaging. The brands are trying to outdo each other by creating fancy shapes and patterns of their bottles, often commissioning their projects to some famous artists. This way they want to draw our attention and make us choose their product instead of many others.

Oftentimes we associate certain perfumes with their packaging. It is enough to mention the famous Chanel No. 5 whose elegant bottle is as iconic as the perfume itself. Manufacturing and selling perfumes is a psychological tactic made for our senses.

But let’s not get ahead of ourselves—after all, our bottle hasn’t left the manufactory yet.

Manufacturer smells the money

For the finished perfumes to get to distributors and resellers, it’s necessary to organize the safe transportation. Its cost takes over 3 euros of the money spent on our bottle.

To the final price you have to add VAT in the amount of 23% and the margins for the reseller and manufacturer. The former takes around half of our money. Obviously, it’s not pure profit. Resellers have to pay the bills and their employees.

Higher net profit of his margin (little lower, making about 23% of the price) gets the manufacturer, although he also has to pay the expenses related to his business. Part of them is spent on the marketing—about 8%. It turns out that advertising our favourite brand costs almost four times more than the perfume itself!

8 euros for Beyonce

It’s no wonder—the marketing machine has to work perfectly for us to identify with that exact brand. It’s no secret that most of us buy those perfumes that boost our ego or make us smell like the celebrity we saw on TV or in some magazine.

By the way, talking about celebrities—Beyonce, Rihanna, or Jennifer Lopez also get their part of our money. About 4% makes so called licence fee, which goes straight to their pockets.

Is there any escape for the perfume lovers from paying for the fancy bottles and famous faces? Yes—paying even more! As the experts explain, it’s the most expensive perfumes that consist of the best quality essential oils made of natural ingredients and the best durability. However, we’ve got bad news—the chance that someone would actually distinguish the scent of real rose petals from its synthetic substitutes is really low.

What's the real price of french perfume?

The information stated above are based on the manufacturers’ reports, international carriers’ offers, data sets found on the professional websites and more. Of course, they’re not a perfect reflection of the reality but only estimation that we used to show the products’ journey to the stores. Not many companies share the details of manufacturing and distribution of their products. By taking a closer look at their prices we want to encourage discussion and above all—conscious shopping!

About VAT: this tax is charged on the net price, which means net price = 100%, gross price = 123% (100% + VAT 23%). Consequently, VAT makes approximately 19% of the gross price.

Check what you pay for

Take a look at our Real Price of Goods series and find out what’s the price of: