1. Where do you spend your money on skin care products?
   (1) Brand. What determines the price of cosmetics is not the price of the product itself, but the brand itself. Therefore, investing in advertising to build a brand is very important for skin care products.
    Let’s take L’Oréal Group as an example to see how cosmetics companies spend and earn money.
    We can see:
    1. The gross profit margin of L'Oreal Group's products is 71.1%. Here, gross profit margin is calculated as: (sales - cost of sales)/sales.
    2. The largest expense is advertising and promotion expenses, reaching 29.1%, and related channel, administrative and other management expenses are also as high as 21.4%. These two items together account for 50.5% of the cost.
    3. R&D expenses are 3.4%, which is already a very high R&D investment. Few cosmetics companies can exceed this investment ratio, let alone domestic cosmetics companies.
    It can be seen that most of the expenses are contributed to marketing and channels, accounting for half of the price, 50.5%.
   (2) The product itself: Let’s look at the product itself. In fact, this part of the cost is included in the cost of sales, and the cost of sales here accounts for 28.9%. Because the sales cost here includes the raw materials, packaging materials, manufacturing, logistics and transportation costs of the product. The only things that concern us are packaging materials and cosmetic raw materials. Excluding production and logistics costs, the cost of raw materials accounts for even less in the cost of sales.
    As for the products in our hands, it is the cosmetic raw materials that really determine the effectiveness of the product. But a very sad fact is that for the skin care products we get, in many cases the price of the packaging materials is greater than the price of the contents composed of raw materials!
So, if you picture it in your mind, how much proportion does raw material account for in the 28.9% cost of sales?
    2. Will there be differences in ingredients at different prices?
    The proportion of raw material costs in product selling prices is pitifully small. If we are to pursue gross profit margins, we will have very strict control over product costs. That is to say, when channel expenses and promotion expenses, which must be spent externally by the enterprise, cannot be changed. , the best thing we can do is to start internally, starting with our own products, in order to increase gross profit. Streamlining costs is a good choice, especially for mid- to low-end domestic products through traditional channels. Due to too fierce competition, gross profit margins are already very low. They are very sensitive to the cost of raw material formulas and no longer have the ability to make products with high raw material costs. .
    But if it is a high-end product with large profit margins, more money will be spent on the product itself, but this is more a matter for high-end foreign brands. From this point of view, it is true that you get what you pay for. But there are times when this is not true. Even if it is a high-end brand, it does not necessarily mean that the cost of the raw materials used will be high. If something can be made with a low-priced formula, why must it be made with an expensive one? Bosses always want to earn more. We can talk a little more, because cosmetic companies usually use one formula for different brands. By changing the fragrance, or adding some ingredients that are advertised, it can be used for different brands.
    According to experts, the core ingredient in the two essence products of Lancôme Little Black Bottle and L'Oréal Paris Little Black Bottle is "lysate of bifid yeast fermentation product". The lysate of bifid yeast fermentation product is a component that can enhance the metabolism of the stratum corneum of the skin and plays a role in cell repair. It ranks second in both ingredient lists, which means the content is not low.
    The more familiar moisturizers, such as sodium hyaluronate and other active ingredients, are present in both products, but they are arranged in different ways. That is, the dosage is adjusted to adjust the feeling of use or to match the effect of other ingredients.
    3. Will different ingredients lead to different effects of skin care products?
    meeting. What ultimately leads to the difference in the effectiveness of skin care products is the difference in ingredients (and technology). Because each company uses different technologies, and your skin needs different products, you will have different brands of cosmetics that are most suitable for you. For example, some people say that niacinamide is good for whitening, but some people don’t feel anything or it’s irritating after using it. Some people use VC to whiten their skin, and the effect is very good, but others say it has no effect and can't fall in love with it. Therefore, the ingredients in the formula and the technology and processes used are the determining factors in the skin care effect.
    Even if the raw materials look the same, the amount of raw materials used is different, which will bring certain differences to the product. Therefore, from the raw material list alone, the two cannot be completely equated. Experts also said that although there will not be a big gap in raw material costs between the two, it is understandable that the differences between the two products are bound to exist. Therefore, the more expensive the cosmetics, the better. When using skin care products, everyone should be good at summarizing the ingredients that suit them, and not be kidnapped by the brand and pay for the brand's expensive advertising fees.
    1. Skin care products at different price points from the same company may use the same technology and even formulas. Therefore, it cannot be said that the higher the price, the more effective the product is. You have to judge by looking at the ingredient list.
    2. For skin care products from different companies at different price points, the more expensive materials are usually better, but this is not always the case, because there are too many cases where big brands use ordinary raw materials to sell them at high prices.
    3. What determines the effect of skin care is not the price of cosmetics, but the functional ingredients and the formula technology used, as well as the degree of matching of the product with your skin and environment.