Cheap vs Premium pricing

As you walk the aisles in the big supermarkets & bulk chemist stores you can see the huge range of different products available covering skin care to hair care and even pet products but you can also see how low priced they are… How in the world can you compete with your new start up venture which is only available for online sales & therefore priced accordingly.

It’s probably even more daunting if you’ve just received your quote to manufacture based on 500 or 1K units… gulp and that’s not including all the other components you need to fix from primary and secondary packaging to potentially your bespoke fragrance and having to consider each MOQ relevant to the supplier. 

But you need to consider this: What’s on those shelves belongs to big brands who when they do a production run or order packaging, they are looking at volumes of 10, 20 or even 50 thousand units without even blinking for distribution across the country. They have the purchase power to enable them to do this and therefore their COGS are very low.  But don’t forget: even if cheaply priced on the shelves, they will still be selling these products with a healthy margin (big businesses still need to make a profit no matter how much they are selling them for) and they still have to pay for all their packaging, manufacture etc.  And remember, those big retailers are also wanting their cut of the margin too and this all eats into the gross profit. 

So, use this to your advantage for your own marketing spin; your products even if they cost more are unique and only available through your online store – in other words, find your tag line, grab a hero ingredient and run with it.