Why Is Cologne So Damn Expensive
[0:00:00] Now, some of you guys are thinking clothes
are expensive because of the raw ingredients.
What they put into the fragrance is expensive, right?
And, logically that makes sense -- oud, orris root, those go for $5,000 a kilo.
Ambergris, that waxy substance from whale stomach costs $10,000 a kilo.
And don’t even get me started on florals, Jean Patou’s Joy, claimed to use over 10,000
jasmine flowers and 300 hand-picked roses in every single bottle.
Well, gents, as logical as that sounds that the more money you spent of a fragrance, the
better ingredients you’re getting, that is not the case.
In fact, price oftentimes has little to do with the quality of the juice depending on
how you judge a fragrance.
So, let me be clear, expensive ingredients do play a role in the price of the fragrance,
they make it more exclusive, but they are just part of the story.
Another big part is the packaging.
People don’t realize how expensive it is to get a custom bottle, get a custom lid,
especially when you’re doing relatively small numbers like companies like Chanel,
Dior, but more niche houses like Roja right here.
I would say that his cost per bottle per lid per top right here is going to be a lot more
expensive than the larger houses that are selling just a lot more.
In addition, you’ve got the cost of a luxury box.
Something like this isn’t going to cost a whole lot.
It looks really nice, very functional.
I think Roja did a great job with this, but still the cost per box is going to be a couple
dollars.
Together, all this starts to add up and increases the risk of the company that is funding that
is actually putting out the fragrance because they’re having to put more money upfront.
A company that spent even more on their packaging, Fragrance Du Bois.
This one right here not only do we have the sleeve, which, you know, that would cost like
50 cents.
Then, you’ve got the fancy box.
As you can see taking this off, that right there probably a dollar or two.
Then, you’ve got an even fancier box that opens up with the inner packaging, though,
unique bottle in the shape itself.
The fact that it’s got these encrusted jewels in here.
This, all of these packaging right here, $15, $25 just for the bottle, we haven’t talked
about the ingredients.
Throwing the cost of the fragrance, you know, maybe $35 if they’re doing a small run.
Maybe you can get the cost down to $20 if you’re making tens of thousands of these.
Now, fancy packaging isn’t new.
When you get a Rolex, you get a nice green box.
You pick up a Monta actually for a fraction of the cost, you get an amazing box made out
of wood, all nicely crafted, leather on the inside.
Point being is companies understand the importance of simply presentation when you receive the
product.
Seriously, even expensive sunglass companies know that actually getting a protective case
with your sunglasses right in there goes a long way.
And I really love when actually company thinks do design and they give you something functional
with the packaging.
And if you think packaging doesn’t matter, just look at the reviews of Fragrance One.
For all intents and purposes, the juice is freaking awesome, made by the master Alberto
Morillas.
I think that this does exactly what it says it’s going to do.
The problem is is the box is lackluster, incredibly simple.
People could forgive that, but whenever they look at that lid at that top, I mean, it’s,
yeah, almost, I mean, it’s flimsy almost non-existent.
You can cut yourself on it.
I mean, the bottle just wasn’t inspiring the people.
People were disappointed with the presentation and that bled into their experience with the
actual product.
And for cheaper fragrances, it can actually have the opposite effect.
Dunhill Racing, relatively, I mean, the juice isn’t super special, but I have to say the
packaging the bottle is freaking awesome and I love it.
And it just makes me feel better when I spray on the fragrance.
Another hidden expense is a good atomizer.
A cheap atomizer is more likely to break, more likely to leak.
Expensive atomizers also allow you to spray out less of the fragrance, more of the fragrance.
It gives you more control, but there is a cost that sometimes they’re five to twenty
times the cost of the cheaper ones.
Now, gents, if you’ve ever worn an expensive fragrance and nobody noticed, you didn’t
get a single compliment, do me a favor, smash that like button in solidarity.
Come on, let’s stick together.
Seriously, if you’re enjoying today’s video, let me know by smashing that like button.
It lets the YouTube gods know that you want to see more videos like this.
Now, I alluded to this earlier, but manufacturing runs, the size of your order has a huge effect
on the price.
Basically, the more that you have manufactured, the cheaper in general it’s going to be.
So, when you have a company like Hermes, you know, they’re getting a hundred thousand
of these made at a time versus a smaller niche house like Zaharoff.
He’s going to get five thousand, maybe ten thousand of these made.
But, even at that number, he’s not going to get the same discounts, he’s not going
to get the same deals.
Basically, they’re going to have a longer run, the company that’s manufacturing is
going to be able to save cost and they are going to be able to, you know, drive down
their own price and make more profit.
So, that’s why a lot of times with niche houses, they have to charge more in order
to be able to make money to be able to make it a legitimate business.
In addition, you’ve got storage, shipping, security fees.
A case of Creed Aventus, that actually is worth a lot of money, so you got to make sure
that nobody comes by and swipes it in the warehouse.
In addition, you’ve got to maintain certain temperature.
You can’t let this be in freezing weather.
You can’t let it be in a room that’s 120 degrees.
And that makes the difference in how much it’s going to cost to be able to store this
for a few months or even, you know, for, you know, half a year.
[0:05:03] Today’s video, gents, is brought to you
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Next up, you’ve got to pay the perfumer.
Now, some houses, they actually kept a perfumer on staff and they were just paying them a
full time salary.
Jean-Claude Ellena, I think he came up with this masterpiece right here, Terre D’Hermes.
Or you’ve got Alberto Morillas and he actually will do side work for a number of businesses.
And the guy has produced tons of fragrances, but still, he’s got to be charging, I mean,
I think well over $10,000 just to come up with a formula that probably didn’t take
him too long.
But, yeah, right there that’s going, you know, the cost of every fragrance and if you’re
going to get multiple iterations, it probably drives up the cost even more.
Now, guys, I want to be really clear, everything I’ve talked about up to this point, these
are not the main drivers of price.
They can have an effect on the price, but there’s two types of pricing in general.
If you’ve studied marketing, you’ve probably heard of cost-based pricing versus market-based
pricing.
Cost-based pricing let’s take it with right here, Dior Elixir Sauvage.
This, let’s say costs $15 for the bottle, for the juice, for the packaging, for getting
it into stores.
So, they should be charging what?
$30? $45$?
Maybe triple the cost of it?
Maybe $60.
No, they’re charging $150.
I think even maybe a little bit more for a 2.5 oz.
How are they getting away with this?
How are they able to charge this price when we see larger bottles going for half of that
cost of, you know, the EDT and other versions of Sauvage?
Because they’re market-based pricing this.
And market-based pricing is what most companies do and they understand that they can actually
charge what the market is willing to bear.
Now, the way a fragrance is marketed will have a huge impact on the way it’s priced.
Right here, we got Paco Rabanne’s Phantom, recently released.
This was going after the young irreverent crowd.
It was all about, you know, that spaceship, you look at the – the videos that they were
putting out about this thing.
Very different and when you smell this, it actually meets the expectations of there’s
nothing else really like this.
Some people hate it, other people like it.
I’m probably in that latter camp.
I think it’s perfectly a fine fragrance, something unique and I really like what they
try to do with this, but it’s also a Paco Rabanne.
So, sometimes the brand that you come from, you got to stick with them a certain price
range.
Paco Rabannes in general, we expect to be about $100 if they’re new.
Once they’ve been out for a few years, they’re at discounters.
We’ll see them at half that price.
This bottle right here came out about 150 ml, so that does affect the price a bit.
Although, you will find that it never is a one for one.
So, a 50 ml is never going to be half the price of a 100 ml.
They definitely, you know, try to – or at least I find I’m going something bigger
because it’s always seems like a better deal per ounce.
Now, with Montblanc Explorer, as many of you guys know about this house, they do a lot
of let’s just say colognes.
Basically, they find DNA that works and then go with it.
So, Creed Aventus was doing really well, a niche fragrance, costing almost $500.
They’re saying, hey, we’ll come in with something that is a fraction of that, just
under 100 bucks and people loved it.
No, it doesn’t have, you know, the same smell as Creed Aventus, but it is close and
for a fraction of the cost, a lot of guys jumped right on it.
And for some brands, a 150 bucks is cheap.
Tom Ford has some really high-end fragrances.
And I believe he has a higher-end version an older one of Beau De Jour.
Well, they came out with a less expensive not using expensive ingredients, a simpler
bottle at a fraction of the cost.
And they were going after a wider market.
And, speaking of Tom Ford, let’s talk a little bit about exclusivity and uniqueness
in fragrances. [0:10:01]
So, if you’re familiar with wines, you know that depending on the year that the wine is
made, depending on where it comes from, all that is going to have an effect on the taste.
To a lesser degree, we see that in fragrances.
The batch number, the year that it’s made.
And exclusivity because sometimes they stop making fragrances, oftentimes they stop making
fragrances.
And you can even agree with, people do this on Creed fragrances all the time that every
year it slightly changes, every batch number it slightly changes.
So, Noir Anthracite, right here, this thing is going for hundreds of dollars.
I picked it up just a couple of years ago for a fraction of that cost.
And, this is a fragrance that I do not think smells really good.
It smells like birth – like cigarettes and people still love it.
And because it’s unique and because there are collectors out there, that drives up the
price as well.
But, you know, this isn’t something I would pay hundreds of bucks for I’m happy I have
it in my collection and, no, I’m not going to give it to you, but it just goes to show
how sometimes price can be driven up by people just simply wanting something when it becomes
exclusive.
And exclusivity isn’t just when they ran out of a fragrance, but also niche fragrances
whenever they do the smaller runs.
And this is I think a big advantage of when you choose a niche fragrance is you can be
pretty much guaranteed in a room of a hundred people, you’re going to be the only guy
wearing that fragrance.
You smell amazing and people are going to be asking, “What is that?
Where did you get that from?”
And, yeah, George, you did a great job with this fragrance.
Amazing.
All right, gents.
So, what’s the answer?
What’s the main reason why fragrances are so expensive?
Well, in 2001, there was a study at the University of Bordeaux.
And they had all of these wine experts, 54 in fact.
These were the top of the top.
They had them taste and try all these different wines.
And they asked them, “Okay, this was a cheap wine, this was an expensive wine.
Did you notice the difference?
What did you think here?”
And, everybody had an opinion.
And, again, these were experts and they definitely had, you know, all the cheap wine you could
tell and this is way they could taste the – they knew exactly where it came from.
The more expensive wines, they had their opinions and this is why they were so good.
The reality is all of them were fooled.
These were the same wines.
In fact, what they thought were a red wine was actually a white wine that had been dyed.
And they did the study again at Caltech.
This time, they hooked up people’s brains to a monitor and they said, hey, this is an
expensive, this is a cheap wine.
And they gave this to experts and what did they see?
Whenever there was an expectation and that is key of it being expensive, their brains
in certain area were more likely to activate and they could actually better taste.
They drew in more flavor and their brains literally told them it was better when the
expectation was higher.
So, why does this matter with fragrances?
There’s a reason why companies like Chanel never discount.
And they actually make things very exclusive.
A lot of their things, you cannot buy unless they allow you to because they set the expectation
of exclusivity.
And I think recently no fragrance unlike, you know, Creed has just done a masterful
job of being able to set that price and that exclusivity despite the fact that they don’t
have a great atomizer, they really don’t have great packaging.
But, because of their price and the belief that this is so good – I’ve smelt tons
of fragrances better than this, but when people save up their money and many people without
a whole lot of money do save up 425 bucks and they buy specifically from Creed’s website
and they smell Creed Aventus, like, wow, this stuff is life-changing and it is to them because
they earned it, they saved up to it.
Well, there are other houses like L’Eau d’Issey Pour Homme Issey Miyake, this is
a beautiful fragrance.
It’s coming out the 1990s, beautiful summer powerhouse, incredibly inexpensive.
It’s not really talked about because its price and exclusivity is relative low.
Or companies like Tom Ford.
I know for me, when I first smelt Black Orchid and I paid full retail for this.
It was a friend recommended one of the first ten fragrances I just could smell all these
complex notes.
I was looking for them and I had – I just, yeah, my expectations were so high and it
lived up to the hype.
Now, occasionally, a company can let you down and not live up to the expectations.
But, if they do a good job hitting all the points we talked about and they’ve got a
well-formulated fragrance, you’re going to be surprised that what you’re able to
smell, what you’re able to pick up, and how it’s going to affect your brain.
Now, gents, what video to watch next?
How about how to make your fragrances last longer?
I know a lot of you guys thin, well, just spray more on.
And that actually is one of the suggestions, but there are a lot of other things that could
be happening why your fragrance is disappearing.
Guys, I cover it all in this video right here.
It’s really probably one of my most detailed videos about fragrances and helping them last
longer.
It’s a good one, go check it out.
Boom, click it.
[0:14:48] End of audio