When Price Gouging Probably Isn't
This happened on a forum for cosmetics-makers recently. The subject of discussion was a luxury, pricey face serum made by a small cosmetics company.
There were quite a few opinions being offered, and the discussion got a little heated.
One participant (let's call her Sally) was utterly appalled and angrily accused the company of price gouging.
I looked the term up – just to be absolutely sure.
Price gouging: when a seller deliberately hikes a price to a much higher level than is reasonable. Price gouging is considered unfair and unethical.
I returned to the discussion.
Sally continued: "I read the ingredients list. None of those ingredients are all that expensive. Their price is totally ridiculous! I could easily copy that product and sell it at a much lower price."
Some offered possible reasons for the price
- Packaging/shipping costs: maybe this small company couldn't buy 10.000 units of cosmetics containers and had to pay a higher price per piece because they had to order smaller amounts
- Location: maybe this company's shop was located in an exclusive, high-rent area
- Business size: maybe this company was not big enough to order ingredients in large enough quantities to get an optimal price
Others agreed with Sally's price gouging standpoint.
Let's Have a LookAs the discussion continued, I popped over to the site featuring the face serum in question and studied the ingredients list.
All good ingredients – and almost every one available in several different qualities (read: at different price levels).
I could see how Sally could reach the conclusion she reached.
I clicked around the site to get an idea of the company behind the product. It didn't take very long to gain a bit of insight as to their philosophy.
Sally had missed a very important point.
There are some things that can't be gleaned from reading an ingredients list – like the quality of the raw material, which processing methods were employed or where the raw material is sourced.
Example: Lavender essential oil is produced all over the world and can cost anywhere from a pittance to a pretty penny. Regardless of its quality, source or production process, it is still labelled Lavendula Angustifolia.
My thoughts went to my own months of research and development – batch after batch of infused herbs in different mediums with consequent weeks of testing until the right combination is finally achieved – none of which would show up on an ingredients list.
It would merely read as a list of INCI names.
Wrong + Wrong Does Not Equal RightSally's viewpoint (and reaction) is unfortunately not all that uncommon. And even though I don't agree with it, I think I can understand it.
But there is one thing Sally said that I simply cannot wrap my brain around. It kept echoing in my mind for days after the discussion ended:
"I could easily copy that product and sell it at a much lower price."
The fact that you even think it – let alone mention it – suggests to me that you would actually consider doing it.
And this is the part I
Can you please explain to me Sally, how stealing someone else's hard work and product development, copying it and selling it at a lower price is not unethical, unfair, and even more appalling than what you unfairly accused the face serum company of?
Even if they had been price gouging, 2 wrongs will never make a right.
When people don't see the hard work (time, resources) you've put into something , and only want to quickly slap a sexy label and sell it a s 'cheaper than yours' ?
I haven't had people copy my formulas but I've had people copy my bath bomb designs on more than one occasion and it's quite disheartening. I pride myself on creating unique designs and my business is relatively new and doesn't bring in much money yet so when people browse my products then intentionally set out to replicate them it's incredibly discouraging.
an interesting thread to read for sure. One thing has stuck out for me though- when developing recipes in this industry surely it can be hard to avoid being labelled as 'copying' as so many of the products all have the same ingredients?
I am developing my own line here in Australia but if a competitor then copied what I was doing it really wouldn't bother me. Emulation is the highest form of flattery and businesses that just get on with what they're doing are the ones that get ahead.
This is one of THE most competitive industries after all and when you release the idea of competition you can focus on your goals.
If your brand is luxurious, scientific, modern, glass and chrome, your customer would be horrified by a product packaged with a raffia tie-tag and a burlap printed label.
Neither approach is wrong, and neither customer is wrong. I actually don't think that Sally can recreate the expensive serum because part of that product is the *experience* the customer has while opening the bottle, relaxing into the application of the product on her face, secure in the knowledge that a major brand who hires formulators with advanced degrees has put together the perfect combination of ingredients for this customer's skin.
It's not about price. It's about brand.
@Valaura - You are, of course, correct. It is indeed most often a long and sometime arduous process to get any formula to perfection - even if you are reverse formulating something.
@Pepper7 - blowing air kisses!
@JenB - Emulation is definitely a different thing and I agree it is a form of flattery.
@JNC - I am so sorry to hear you had to experience this. It hurts much more when it is someone you though was close. My only thought here is: I hope karma visits this person!
@Sirin Samiljan - You make some excellent points, and I agree that sally would probably not be able to recreate this face serum - which is why I chose to illustrate this post as I did.
@K Salon Organic Beauty - Your comment is very interesting! I have the same doubts about Amazon for the very reasons you mention. It would be great to have a source where one could be assured of the level of quality and ethics of the producer.
That serum is a luxury product and can be priced at whatever their market and customer demographics will bear. It's all about their "ideal customer" and if they are comfortable with the price, more power to them.
As to copying, that's trickier. Are they really copying? They have the ingredients list, but not the specific amounts of X, Y, or Z and as you've mentioned, the quality of the ingredients matter.
I'd also add that to some consumers, like me, the sourcing matters as much as the quality. I don't care if Monkey Pee can turn back the clock on my skin twenty years, those monkeys better be treated well and paid a living wage before I go using their pee. (I joke with my example, but hope you get the idea)
There are things that I've made that are definitely inspired by other products, no idea begins in a vacuum. I'm not selling skincare at this point, but I have sold handsewn garments in the past. One of my best sellers was inspired by a pair of pants that the original brand was no longer making. I did mention that in some of the original posts about them, but they eventually took on a life of their own. I hadn't even literally copied the pattern in the first place. I had drafted my own pattern with an old school pencil and big sheets of drafting paper, then changed even those immensely over time, gone to organic or vintage fabrics, added pockets, customized them for individual customers, changed markets from Etsy to local, etc. Where do we draw the line?
Marie has a very valid and clear cut case of horrible and illegal copying. I don't question that for a moment.
I also don't question that all of us put a lot of blood, sweat, and tears, not to mention dollars into what we create, be it skin care or comfy lounge pants.
I do feel that there is a point where all creatives need to accept that in order to be able to put our ideas out there we have to accept some risk and be realistic enough to know that that risk is slight if we are doing everything we can to promote our own ideas and values while continuing to grow, both as people and as creators.
My main objection to *Sally*s comments was her attitude. She jumped to conclusions and proceeded to act on it by dissing a colleague - unfairly! I find her whole mindset awfully disturbing. This kind of mindset does not encourage constructive discussion, inspiration, or anything positive for that matter. I believe we all can and should do better than that.
Sorry that I missed your very valid point about her mindset, I agree! Her contribution to the discussion is toxic.
How sad is it that I've gotten to the point where I accept that there are yahoos like her out there and tend to tune them out? I need to work on my complacency.
This is a topic I've thought about for years as I meet so many people in my work and watch and listen. I think character is what it comes down to. How teachable, contemplative, respectful, responsible, and humble a person is makes all the difference. I am preaching to the choir...
Could you replicate that same product for less...I don't know. The question I have is why, with such a short time on this earth and so much knowledge to gain, beauty to enjoy, and good to do in the world does anyone waste their time complaining about a private company's product prices.
We should value each other's hard work and be willing to pay for something of value monetary or otherwise not degrade it. I think this is the nerve that struck Lisa who legitimately has earned the right to sell her products for their true value and along comes Sally ignorantly judging a similar work based on, well nothing solid it sounds like.
Believe me I have met 10,000 "Sallys" in my career, and in the midst of their threats and rants and demands my mind wanders to the thought that I am truly grateful that I'm not related to this person because it would ruin Christmas! And then I try to concentrate very hard so my internal giggling doesnt accidently leave my lips ;)
I am going to whip up one of your body butter recipes today and be thankful to have met you, so to speak, and look forward to what I can learn from you and purchase an ebook. Chances are Sally's days aren't so full of good Karma lol.
Ignorance is not bliss, it is stupid and dangerous
If I were a needlepoint kind of person, I do believe I would be full on stitching up a pillow cover as we speak. Thank you again for sharing your thoughts.
Right you are and thanks for sharing!