One of the biggest challenges herbalists and skincare makers have is what to charge for their skincare products. Pricing strategies for handmade and custom skincare products are not the same as for mass produced products. Most makers have no problem charging enough to cover the physical, tangible costs of creating their products–ingredients, labels, bottles, etc.–but are very reluctant to charge for their labor.
So far in the Back to School, Back to Business series, we’ve covered multiple challenges that skincare business owners face and how to overcome them. I’ve shared how I’ve personally overcome them in my own businesses, and also I’ve given you some strategies that I teach my Create Your Skincare Professional Edition students.
Here are Lessons 1 through 4 if you missed them:
- Are Your Natural Skin Products Good Enough to Sell?
- The Mindset You Need for a Successful Skin Care Business
- How to Overcome Perfectionism to Rock Your Skin Care Line
- Marketing Your Skin Care Line: Where to Start
So today I want to address product pricing. We’ll go over pricing strategies that not only position skincare business owners to see profit sooner rather than later, but also in a way that helps them feel that they’re receiving an equal exchange of value for their hard work.
Watch Lesson 4–What’s Your Pricing Strategy for Your Custom Skincare Line–below!
Pricing strategies for can be tricky when it comes to the notion of skincare as a service, which is what herbal and custom skincare products are.
For products alone, you essentially add up what you paid to obtain your raw materials, packaging, and the cost of whatever labor is involved (including YOURS). You also want to take into consideration what it will cost you to market your products. Once you have that number, you then mark it up to wholesale if you intend to sell to spas, stores, or other distributors; and then they’ll mark it up again, and then if there’s still another distribution channel, the final retailer will even mark it up again.
However, if your products are custom-formulated for individual clients, or you include products from your signature skincare line in a package of aesthetic treatments or health coaching sessions, your pricing strategy needs to change.
There are a lot of different ways you can work out the numbers. I offer a user-friendly price formulator to my Create Your Skincare Professional Edition course. There’s also software that you can invest in once your business is ready for that.
The most important thing to remember though is that if you’re an aesthetician, herbalist, health coach or another type of practitioner who works with skincare clients and you’re offering custom-made products to them, you can’t just price the physical product. You have to incorporate the consultation, formulation, and reformulation service you’re providing into your pricing strategies.
Business stress is often caused by pricing problems more than anything else.
Something I learned from one of my mentors early in my business is that if we feel really drained, like there’s never enough hours in the day; or that people are just taking more than we’re giving and we’re not feeling fulfilled, it’s usually a pricing problem. It usually means that we are not valuing our own time and our own offerings enough; and hence, we’re not charging the right dollar amount for that value.
Skincare as a service cannot be compared to products someone just buys at the store, because in that scenario, there’s no actual service involved. This is even true if they’re shopping at a counter at a department store, because the person there will just grab whatever product off the shelf that goes with your “skin type.” I know, because worked behind a cosmetic counter at a high end department store. The only service I’d perform had to do with makeup application, rather than anything having to do with skincare.
However, when you make custom products for someone, you consult with them, gather an understanding of their history and goals, what kind of lifestyle they have, what their preferences are, and you build a trusting client/practitioner relationship. The custom skincare products you make them are a culmination of all of those different factors, your relationship with the clients, and your expertise of ingredients and formulation along with that. What’s really special is that the final product that comes out of that process is a co-creation between you and the client. This is a very different business model than retail sales, or even consultative spa retail sales, and your pricing strategies must reflect that.
People will always find time and money for what they value.
They might not be able to find it right this second, but if it’s something they truly value, then they will find a way to save (or get) the money and make the time.
I want you to also understand that your prices, your products, your services, and your business won’t be for everyone. And that’s okay. The cheapest product on the market is not for everyone either. For example, I certainly won’t to go to the drug store and buy a $3.99 cream off the shelf because I don’t value the product or that buying experience. The price is irrelevant to me.
I just recently had a pricing/competition discussion with a new Create Your Skincare Professional Edition student and used the example of Starbucks versus a local coffee shop. I live near the Chestnut Hill neighborhood of Philadelphia, where on a single block, there’s a Starbucks and a long-standing local coffee shop right across the street from each other. The Starbucks customers will only go to Starbucks because they identify with that brand, and the local coffee shop people will only go to that shop because they prefer to support the small business. The pricing is irrelevant for both, because each shop’s customers have different values–and they gladly pay for that value.
This doesn’t necessarily mean you have to charge luxury, premium pricing with your skincare products. If your numbers based on your costs and your process work out that you can do it for more affordable prices, and that suits your business model, then have at it. I AM saying, however, to make sure that you feel compensated both in terms of your costs, and in terms of your labor and energy.
Everything having to do with your pricing strategies should be purposeful, starting with your ingredients.
I see so many herbal skincare products that contain all of these beautiful herbal extracts, exotic carrier oils, and essential oils, and impressive botanical blends. That might look impressive on the bottle, but the product itself still has like 40+ individual expensive ingredients. I call products with these lengthy ingredient lists “laundry list products.” My friend Maia Toll (who was one of my wonderful Herbal Skincare Summit teachers) calls them “kitchen sink” products.
What this means is that just because you can put an ingredient into a product because it’s a cool or trendy ingredient, it doesn’t mean it’s actually the right ingredient for that product. Putting expensive ingredients into your products just to be fancy is the easiest way to eat away your profits before you have the chance to make any.
If keeping costs and prices down are important to you, then you must be more mindful of the ingredients you use. More expensive and rarer plants or oils do not necessarily translate to a better product.
When it comes to phytonutrients and herbal actions, many plants share the same ones. So if you take an expensive essential oil or carrier oil, and compare at their phytochemistry, essential fatty acid makeup, and all the phytonutrients in the plant themselves, you’ll notice that a lot of them are really similar. In these cases it makes more sense to use the less expensive, less rare ingredient cost-wise, and your product will still be just as effective.
I also teach my students to work towards simple, purposeful ingredient lists of ingredients that are multitaskers.
This is a great way to keep costs down. When I did the Herbal Skincare Summit (which you can still purchase here), Kevin Gianni (one of the owners of AnnMarie Skin Care, which is a lovely line that was actually initially created by an aesthetician) was also one of our teachers.
When I interviewed Kevin for the Summit, I asked him, “what’s something that you would have done differently in your business?” And he said, “starting with fewer SKUs.” One of the recommendations he made was to start with one product, have it connect with your audience, and then go from there.
Because it does not make sense to put a product out into the world if the market doesn’t need it, or if your client just doesn’t see value in it because they’re already having that need met otherwise.
Before you add another product to your line, have a reason for it and make sure that it’s wanted and needed, and that people are willing to pay you for it.
It has happened to me many times, where people would email me and ask me to create a course about something, or a specific kind of product, and then I’d create it for them, but they didn’t actually buy it. So it’s really important to gauge your market not only with what they SAY they want and need, but that they actually are willing to spend money on. I learned that one the hard way!
I’d love to know, are pricing strategies for custom skincare products something that trip you up?
Or have you found pricing strategies for your natural skin products and services that are working great for your business? I would love to know about it! Please share your experience in the comments below.
If this is something you need help with, I would love to teach you more in Create Your Skincare Professional Edition.
If you are looking to start or grow your skincare business, or offer custom skincare to your clients, then come join me here! Class starts soon 🙂
I’ll be back tomorrow with the sixth and final post and video in our Back to School, Back to Business series. Be sure to click the red bell at the bottom right of your computer screen to get push notifications, or subscribe to my email community below so you don’t miss it!