I use to walk the pharmacy isles (because I couldn't afford anything at a department store) searching for the next best thing for my skin. I'd scoff at a cleanser that cost more than $15—I still have a hard time buying shampoo that costs more than $10 a bottle.
When people approach me at an event or ask about my products, I know the question is coming and I brace myself... "How much for a bottle?" I know that our product isn't cheap, especially if you typically buy your skincare from Target or Rite-Aid—but even you, Target shoppers, know that companies than can sell a 200ml bottle of cleanser for $8 are not conducting wholesome business, nor are they putting your well being first. We dare you to call a company like Biore and ask why EWG rates them a 6.
I, by no means, am saying that we don't make mistakes or that we are doing it the right way—but we are working toward making our little business viable and to maintain sustainable manufacturing practices. We also want to make sure that we are not only being appropriately fair and concerned with our customers well beings but also our own, our (future) employees, vendors, community, environment and business partners.
So - let's dig into a bottle of Dew and analyze it's cost ingredients a bit, shall we?
This is broken down into our 7 main financial categories that we commonly use for projections, inventory planning and gauging our success. These 7 categories make up our overall cost of doing business and as we are less than a year old we expect these to vary over the next few years. So, let's break down our $81.95* bottle of face oil.
MARKETING: This includes printed materials for events and that are included in each shipment to a customer. Digital advertising, like goggle ad words and facebook advertising. Affiliate commissions, PR efforts, blog content, giveaways, email marketing, event costs and photo content.
SHIPPING: We are able to offer free shipping on orders over $75 because we have build some of our shipping costs into our product. While orders under $75 will pay $3-$16 (depending on the product and shipping service selected) the majority of customers get Free Shipping.
OPERATIONS: This is a big one, it encompasses many things like salaries and wages (that have yet to exist), contractor wages, legal fees, rent, utilities (like internet and phone), credit card processing fees, website hosting, design software, and probably a few other things I'm forgetting.
COST OF GOODS SOLD (COGS): This is a variable number that we are excited to one day reduce when production goes up. This is the product: each and every ingredient, the bottles, labels and shipment materials. As I previously mentioned in SHIPPING we have also worked in a portion of shipping so that we can offer free shipping at a certain level.
DISCOUNTS: I knew that I wanted to have the ability to work with select retailers and thus had to price our product so that we could maintain the cost of doing business and selling our product at a discount to other businesses (B2B). I also want to make sure that we can provide promotional pricing, sales and discounts to our customers (you're welcome). This also includes tax-deductible donations given to organizations that we want to support for doing good.
INTEREST EXPENSE: I was not sitting on a pile of dough when I launched this business and thus I am slowly paying down debt every month. Ya gotta start somewhere!
NET PROFIT: The actual amount of profit that is left over after we pay the bills and make the dew. Our Dew isn't bringing in any kind of profit quite yet - but I've got that projected for a few years from now.
I know that $81.95 seems crazy for a bottle of face oil, but we promise we aren't ripping you off. I hope that this information provides some welcome information as to why our prices are what they are. I want to share this information with you because I pride myself on being transparent with my customers. I want you to feel guilt-free, regret-free and be making an informed decision on what products you bring into your home and if that decision is to have our dew on our vanity, we are so grateful.
Please don't hesitate to reach out if you have any questions.
Now get back to dewing it!