To wholesale or not to wholesale

The perfume industry is interesting. Not every customer is confident enough in their knowledge to describe, or even recognize the notes they are smelling. This allows for room to fantasise and create stories, but it also allows for vagueness. There’s a mystery surrounding the individual elements that make a fragrance smell so divine. One search on the Internet is enough to find out that often the ingredients in a luxury fragrance don’t actually cost that much. So, where is that price tag coming from?

A high quality perfume is about more than just a beautiful scent. It’s the bottle and packaging, and so much more. It’s a sustainable supply chain, and the ethical treatment of workers. It’s the creative team who build a website which represents the brand well. These things add up, resulting in a more expensive product—just as a silk dress made ethically, sustainably and beautifully packaged will have a higher price tag than a silk dress made in a factory by underpaid staff. In luxury perfumery, like luxury fashion—and we believe ethical products are the only true luxury—the end price reflects the time and effort of many well paid staff. 

This is where wholesale makes things difficult. At Bel Rebel, we have experience working with distributors and agents prior to running a multi brand perfume boutique two years, stocking hundreds of niche fragrances, and this has informed our understanding of how wholesale affects a brand.

There are certainly a lot of benefits to selling a perfume through bricks and mortar stores, the main one being that we are still not able to experience scent through a computer screen, so the presence of the brand in the boutique is the only way the brand is physically translated around the world. Oftentimes the right wholesale partnerships are necessary for brands to reach their customers. 

The trouble is, this means either the customer, or the brand isn’t getting what they deserve. We did the maths and realised that some of the niche perfume brands, retailing their fragrances for a significant price, end up making very little after all the costs of running the brand, producing the product and sometimes also working with a distributor. It seems like the profits after these costs might have not covered other essential parts of the business, in effect making it unsustainable. When the standard wholesale price is 50% or even 70% below retail price, the quality of the product is unlikely to reflect its cost. 

Of course there are other reasons why brands depend on boutiques to sell their products—these boutiques often produce creative content for them and organise marketing and influencer campaigns. After all the costs, for 60% of the price, they end up taking care of various promotional activities, while still making decent profit themselves. 

Frankly, at Bel Rebel we don’t think this makes sense. Brands are torn between two options: shifting the promotional operations to their retailers or just not promoting altogether. We wish this model could be a bit different and we will be trying to work with our partners differently. This hopefully will open the the market to opportunity and common understanding, and maybe even encourage more sensitivity towards each other. There is absolutely nothing as luxurious as knowing that people working along the way are well rewarded for their work, this in effect should promote the average farmers livelihood and promote further transparency along many pricing issues in todays perfumery world.