The cost of cosmetics: what determines the value of your products?

All cosmetics are not the same. The cosmetics industry is one of the largest, and there are products on the market for every need and budget, from the luxurious to the low-cost. But what determines the cost of cosmetics? Why do some products cost more than others? I explain it to you in this article!

The cost of cosmetics is influenced by various factors, including raw materials, packaging and marketing. Is an expensive product always of higher quality? Not necessarily!
It is not enough to look at the cost to understand the real value of a cosmetic, but it is important to understand the mechanisms that define pricing in order to make more informed choices.

Let’s look together at the factors that determine the price of skincare products:

Raw materials

Raw materials in cosmetics vary in quality, cost and origin. High-quality ingredients, often natural and organic, tend to be more expensive than synthetic ones. Pure essential oils and natural butters such as argan oil or shea butter, if sustainably sourced and hand-harvested, can be expensive.

Rare or difficult-to-obtain ingredients that require complex extraction processes increase production costs. In the case of Skean, the use of the CytoFruit , the sustainable alternative to potable water, affects the price of the products in our waterless line.
If you want to learn more, read this article !

Certifications and regulations

Certifications increase production costs. Products with certifications such as“organic,”“paraben-free,”“cruelty-free,” or“vegan,” such as ours, must meet stringent criteria and undergo independent verification. This affects the final price of the product.

Packaging and presentation

Packaging is one of the factors that affects the cost of cosmetics the most. Products that feature elaborate packaging and high-quality materials such as glass, metal, or recycled plastic are sure to cost more.

In addition, packaging is not only aesthetic but also functional, as it must ensure the optimal preservation of the product.

Marketing and brand positioning

Marketing is certainly a very important factor in price. Advertising campaigns for launch, brand positioning, and influencer collaborations involve very high costs that will affect the final price of the product.

Small productions, big costs

Economies of scale influence production costs and thus prices of cosmetics. Large companies can produce at lower costs through large-scale production and sourcing raw materials at reduced prices.

Small independent brands, on the other hand, have small quantity production, and sourcing raw materials in limited quantities results in higher unit costs, which is why some products seem to us to cost “too much.”

Research and development

Another factor affecting price is the research and development of the product itself.
Companies invest resources in developing new formulas and testing for efficacy and safety.
Many tests are needed to verify the formulations, textures, fragrances, and final performance of the prophylactic. In addition, when investing in a new formulation on an “exclusive” basis, such as Skean’s, costs can be considerably higher.

Behind the launch of a new cosmetic there is a lot of energy and especially a lot of investment.

Ethics and sustainability

Attention to sustainability and business ethics has become critical to a brand’s reputation. Companies that engage in sustainable and ethical practices, such as responsible sourcing of raw materials, reducing environmental impact and respecting workers’ rights, often incur very high costs.

For example, a company that uses fair trade ingredients or is committed to reducing plastic or water use may have higher production costs, which will definitely impact the final price of the product

In the case of Skean, the commitment to sustainability is one of the cornerstones on which we have developed our brand, managing to combine care for the environment, with the development of high-performance products, while trying to maintain a price that is always fair to the consumer and our suppliers.

Article written by. Paola De Nicola