Back in the days before internets, brands could price pretty much as liked from country to country – it was always something of a secret that you could find beauty products far cheaper in other countries than you can here. The USA is a good case in point, although you must remember that most websites aren’t showing sales tax which differs from state to state. And the dollar rate fluctuates (most in our favour).
When a BBB reader asked me why a particular NUDE product is less expensive in the US than it is here, I really wanted to know why. It’s completely unexpected from this brand. Most brands will try and keep an acceptable ratio between prices taking into account exchange rates and shipping costs. So, when you’re looking at brands that are more expensive here than in the US, you actually need to be looking at the retailers who are selling the products more expensively.
If a product is with a huge retailer, they’re more likely to want to offer competitive pricing. The retailer is king when it comes to small brands and if they want to sell it cheaper, nine times out of ten, they can do as they please. It can be the case that a retailer agrees to sell at a particular price and then changes their mind.
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Which is what happened to the NUDE Rescue Oil I blogged about – one minute it was in price alignment, the next is wasn’t. Although NUDE is part of a bigger beauty conglomerate (LVMH), each brand has to stand on its own two feet.
The same brand can have entirely different retailers across the world and with that comes different audiences and consumers. In light of BBB readers being hot on this issue (and I thank you for it) and educated around pricing variations, I was able to flag it up to the NUDE team as something that needed to be sorted out.
As it turned out the NUDE team were already on it! Some brands would just let it be, but I know the NUDE team and it’s just not their style so I wasn’t all that surprised that they were already actively making changes to the pricing.
The upshot of all this is that NUDE Rescue Oil will be sold now in the UK for £58 instead of the originally proposed price of £62. This takes into account the movement in price overseas. It’s launching on 5th June into SpaceNK and my blog post with review is HERE.
Don’t even start me on what retailers in France are doing to beauty pricing – they pass on so many costs to brands and don’t like to reduce prices for consumers. It’s a hornet’s nest! I’ll blog more about that when I’ve got my facts solid.
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All products are sent to me as samples from brands and agencies unless otherwise stated. Affiliate links may be used. Posts are not affiliate driven.
23 comments
Oh! This is a very interesting topic.
However, I would love to hear what is the reasoning behind the pricing in brands like MAC where they have their own stores to distribute their products and yet you find price differences that are sometimes surprising
Exactlly! For example the Studio Fix foundation is 27$ in US (17,2£/ 24€), in UK is 21.5£ and in Italy is 31€…..
I find that Estee Lauder brands are some of the worst offenders for overpricing in the UK market. Case in point: Smashbox on the Rocks Photo Op Eye Shadow Luxe Palette, Christmas 2014. USA price: $42. UK price: £49. Even after the average 10% sales tax in the USA (depending on your State) you’re still looking at a total dollar price of around $46. No comparison at all.
MAC are also under the Estee Lauder umbrella. They seem to be a little better behaved of late – £38.50 for the Cinderella eyeshadow palette ($44), for example. Still a little hard to swallow paying £15 for a $15 lipstick though!
I think the worst offender that I remember was last Autum’s Brooke Shield’s Gravitas palette 85$ vs 154€. Simply unjustifiable!
Excellent read-fascinated about pricing differences. Its interesting to me how Urban Decay showed up in Sweden with a Swedish retailer and was able to offer more or less the same prices as in the US but prior to this, Sephora arrived and from what I understand, brands are more expensive in our one’s than in the US, even with tax. Looking forward to reading about France!
I am very familiar with this issue since i am an expat. Products will have a price difference of up to 50%. This is not only for beauty but also food items. I notice often that companies adapt to the average income in the country they are selling in.
One has to take of cause into account also that different countries come with different regulations and packaging has to often be adapted. If you want to sell hair gel in Belgium or the Netherlands, the product description should be present in dutch and french while for the german market, german description is a must. Some countries have regulations on certain ingredients etc. So sometimes companies either choose to not directly sell in smaller countries or increase the price to make the marketing and production of new packing worth their while.
And then obviously the retailers do their part in the respective country. They want to earn a good living for their employes in the specific country and with housing and food prices being very different in different countries i find it normal that the prices of the products is adapted to the local living cost and average wage.
Thank you, Jane.
It is still a £10 difference so they really cannot justify the dollar exchange rate or taxes which are a tiny fraction of the end price, if they are charged at all. And shipping in the USA is nearly always free.
Is the brand actually manufacturing in the U.S. too? Otherwise with shipping and duties on the U.S. end, the markup must be huge to allow for such a discrepancy and for the retailer to make a profit.
The world is becoming a smaller place and at the premium end is often the same customer from country to country. LVMH and other luxury brand owners have already started to unify their prices across luxury items such as handbags in China where the retail price was often twice that or more of France.
And what with cheaper transatlantic flights coming into play it soon won’t just be laptops that are being brought back in empty suitcases!
If NUDE really wants to appease its customers, it can choose to keep prices lower on its own website where it already keeps a greater % of the retail margin. It can also choose to use a distributor whose contract does not allow for price discounting by retailers.
But the reason they are not doing this is because they are now owned by a large ‘investor’ whose sole motivation is more bang for their buck. Hence international expansion, cheaper formulation changes and distribution agreements that hand over more power.
The danger with all this is that the consumer is becoming more educated and less and less likely to buy a product on blind loyalty alone. A lot of people still think that a brand remains the same when it is sold out (and often don’t realise that it has been sold) but when you look at the label, you see that it is brand in name only. And this is becoming more and more common knowledge.
Good luck to NUDE (or rather, LVMH) but I won’t be buying their products again until they bridge this gap across the pond. At that price, I can ship over an equivalent American brand and after customs duties, still pay less.
I apologise for this completely irrelevant comment, but is there any way of disabling that BeneFit advert auto playing on your site? It keeps playing every time I load your site, and it’s noisy!
It shouldn’t be automatically playing – I will get tech to check it.. we disabled it once, because I agree with you, but it’s such a strong and important message that it’s a bit of a conundrum in knowing what to do. x
Oh, I agree, the message is really important – but autoplaying videos are not what you want when you’re sitting in a cafe reading over lunch 😉 (true story)
Spoke to my tech who says its not autoplaying.. I’m so sorry – not entirely sure what to do now! Is it still doing it?
Just taken another look Sophie – there is the option on the ad to turn the volume down.. I think you must have your volume accidentally turned up. So the ad plays on a loop but if the volume is not on then you won’t hear anything. Let me know how it goes.. we will get this sorted!
The best example of this is MAC pricing in Canada vs. US. MAC eyeshadows are MADE IN CANADA, yet the U.S. prices of their eyeshadows are significantly cheaper than in Canada. The exchange rate/duties/taxes argument doesn’t hold here at all. It’s pretty shitty.
Love your business insights Jane! Interesting comment Sam. There’s a big article in the ft today on what happens when indie fragrance houses sell to conglomerates, I haven’t read it yet as I’ve reached my maximum free articles 🙁
I have to say I hate auto play too. I usually have my volume off on my phone but not always and that ad always makes me jump! Ad creatives need to stop making auto-play ads! *rant over*
The ad is switched off though.. it’s definitely not playing unless you have the volume on the actual ad turned on.. so check that. Me and Thom have been over it and over it..
It’s not the difference it prices that bugs me but the lack of difference in prices between UK retailers. Full marks to one internet retailer whose name begins with e for bringing a bit of price competition into the UK market.
Too obscure for me. Can we get another clue?
Escentuals?
I get very annoyed when the difference in prices are not only for high-end products, but also for drugstore/pharmacy products, even across Europe. I stopped buying L’Oreal group, Revlon and a few others because of the huge difference in pricing between countries. I think it’s extortionate to price a mascara at 18 euros, when I could find it in the UK for around 10 pounds or a foundation at 20 euros and in the UK it would be 12 pounds. On the up side of things, I have found quite a few other companies that have fairly priced cosmetics and will continue to buy from them.
I went a little bit crazy when I visited my boyfriend in Germany and saw my beloved Garnier BB Cream for combination skin for 6.99€. It’s above the £10 mark in the UK and when I lived in France I bought it for around 10€.
First of all, I think it’s insane to have price difference for drugstore cosmetics, proportionally it makes such a difference it’s hard to ignore the huge margin that Boots and Superdrug make on a tub of drugstore BB cream. Pretty off putting to me.
Secondly I simply don’t understand price differences in the euro zone, these are unacceptable to me (and it’s not just because I’m staunchly pro-EU). Monetarily and border-speaking France and Germany are literally the same entity and the living standards are pretty much equivalent. Apart from taxation there is really no excuse (an argument in favour of an European-level VAT!)
Really interesting. I have also often wondered why American brands are so much more expensive here than in the US, and not just beauty brands, but also clothing or “lifestyle” brands, most notably J. Crew and Anthropologie. I know they are also considered expensive in the US, but they are much dearer still in the UK. It can’t all be down to higher tax/ operational costs, surely?
There are some global brands, like Zara or H&M, that are priced very similarly in Poland (where I come from), but premium beauty is more expensive than in the UK (while the average income is much lower), because of very high VAT on imported “luxury goods” (this not only makes money, but also serves to protect the local manufacturers, of which there are many). I’d be very much in favour of European – level VAT, but I am sure local brands would be against it.
I just won’t shop at all at J Crew in the UK.. it’s crazy prices compared to US.
I’m always surprised when British brands are so much cheaper in the USA as it seems counterintuitive. For instance Nails Inc and Boots No 7 are pretty much dollar for pound.