The Ordinary: What Are These Sweet Priced Vials REALLY Worth?
THE ORDINARY: MY OPINION
The Ordinary belongs to the DECIEM group and was founded in
2013 by Brandon Truaxe, an Iranian-Canadian visionary, who unfortunately died
very prematurely only a few months ago (like any genius, his dark side has
unfortunately taken over). He leaves behind a flourishing group, with 5 pillar
brands to his credit:
- ·
The Ordinary
- ·
NIOD: the one that interests me the most
- ·
Hylamide
- ·
The Chemistry Brand
- ·
Fountain: I regret to announce that the brand
has ceased its activity for the moment (they made, among other things,
hyaluronic acid and collagen to drink)
Brandon's idea? Being neither a chemist, nor a cosmetics
formulator, nor even a marketer (he is a computer scientist), he was passionate
about beauty and decided to offer products at fair prices! Do the opposite of
what everyone else is doing and thus change the beauty world!
Do you think that was already the case for "products at fair prices"?
If you know a little about the world of marketing, you know
that the cost price of a product is sometimes very far from its displayed
retail price. The Abnormal Compagnie, the little name given by Brandon to his
company, therefore had the ambition to offer us treatments at prices... which
are worth their price! Inevitably, this had a bomb effect on a market that once
had to "make us dream" in order to sell better.
Their answer: everything is based on
sales VOLUMES. It is true that when we sell 1,000,000 units or 1,000 units the price,
we pay for our raw materials is not the same. When you buy 50 liters of rosehip
oil or 5,000 liters from a producer, you do not pay the same price per liter
(the more you take, the lower the price). And it is true that the volumes of
the brand are impressive! I asked for the number of units sold in 2019 for two
products:
Hyaluronic Acid 2% + B5: 3,700,000 units
It's a lot! I cannot give you comparative volumes of other
brands (this is confidential information and I was already lucky that The
Ordinary agreed to communicate it to me), but take my word for it, it is
clearly less with niche brands (for Pai, Skin Ceuticals we will talk about
thousands of bottles but not millions).
100% cold-pressed organic rosehip oil (from Bulgaria): 1,000,000 units
when they started, they did not have these volumes: knowing
that selling at a loss is prohibited, this means that their margin was close to
0 and that the cost prices of raw materials (since such volumes could not be at
RDV at launch) are definitely not very high
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