How to outsource the processing and production of skincare products to cosmetics factories and determine market prices
After handing over the processing and production of skincare products to cosmetics factories, how to set market prices is a key issue. Pricing not only affects the market competitiveness of products, but also directly relates to brand profits and consumer acceptance. The following are detailed steps and strategies for setting market prices for skincare products:
1. Cost accounting
production costs
Raw material cost: Calculate the cost based on the raw materials used in the formula, such as active ingredients, base oils, emulsifiers, etc.
Packaging cost: including bottle body, bottle cap, label, outer box, etc.
Processing fees: Processing fees charged by the factory (such as OEM/ODM fees).
Other costs: such as testing fees, filing fees, transportation fees, etc.
fixed cost
R&D expenses: expenses for formula development, sample testing, etc.
Marketing expenses: advertising placement, KOL cooperation, promotional activities, etc.
Labor costs: salaries, design fees, etc. of the brand operation team.
2. Market research
competitive analysis
Price range: Study the price range of similar products in the market (such as parity, mid-range, high-end).
Product positioning: Analyze the core selling points, packaging design, target audience, etc. of competitors.
Sales channels: Understand the pricing strategies of competitors online (such as Tmall and JD) and offline (such as shopping malls and pharmacies).
consumer research
Target consumer spending power: Determine an acceptable price range based on the target consumer's income level and consumption habits.
Consumer psychological expectations: Understanding consumers' sensitivity and value perception towards skincare product prices.
3. Pricing strategy
Select an appropriate pricing strategy based on brand positioning and market research results.
Common pricing strategies
Cost markup pricing:
Formula: Market price=Production cost x (1+profit margin).
Applicable: Suitable for start-up brands or cost oriented enterprises.
Competitive pricing:
Pricing based on competitor prices, slightly higher, flat, or slightly lower.
Applicable: categories with fierce market competition.
Value oriented pricing:
Pricing based on the perceived value of the product to consumers.
Applicable: High end brands or products with strong functionality.
Penetration pricing:
Enter the market at a lower price and quickly attract consumers.
Applicable: New brands or categories.
Pricing for skim fat:
Enter the market at a higher price to attract high-end consumers.
Applicable: High end brands or innovative products.
4. Price range reference
According to market positioning, the price range of skincare products can be roughly divided into the following categories:
Affordable price: below 50 yuan, targeted at students or consumers with limited budgets.
Mid end: 50-200 yuan, targeted at working women or consumers who pursue cost-effectiveness.
High end: over 200 yuan, targeted at consumers who pursue quality, natural or functional products.
5. Pricing Example
Example 1: affordable moisturizing face cream
Production cost: 10 yuan/bottle.
Packaging cost: 5 yuan/bottle.
Processing fee: 3 yuan/bottle.
Total cost: 18 yuan/bottle.
Profit margin: 50%.
Market price: 18 × 1.5=27 yuan/bottle.
Example 2: High end anti-aging essence
Production cost: 50 yuan/bottle.
Packaging cost: 20 yuan/bottle.
Processing fee: 10 yuan/bottle.
Total cost: 80 yuan/bottle.
Profit margin: 200%.
Market price: 80 × 3=240 yuan/bottle.
6. Dynamic adjustment
Promotion activities: Attract consumers and increase sales through discounts, discounts, and other means.
Channel differences: Online prices can be slightly lower than offline prices to attract online shopping users.
Seasonal adjustment: Launch limited time discounts during seasonal changes or holidays to stimulate consumption.
7. Brand premium
Brand Story: Enhancing consumer identification through brand culture and philosophy.
Packaging design: High end packaging design can enhance product value.
Celebrity endorsement: Invite celebrities or KOLs to endorse and enhance brand influence.
summarize
When setting market prices for skincare products, factors such as production costs, market research, pricing strategies, and brand premiums need to be comprehensively considered. Through scientific pricing, brand profits can be guaranteed while meeting consumer demands and enhancing market competitiveness.