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.