What do we feel about cost of Oud oils?

Discussion in 'General' started by Mr.P, Aug 3, 2016.

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What do we feel about cost of Oud oil?

  1. Way Overpriced

    26 vote(s)
    37.1%
  2. High

    28 vote(s)
    40.0%
  3. Unreasonable

    3 vote(s)
    4.3%
  4. Fair

    13 vote(s)
    18.6%
  5. Cheap

    0 vote(s)
    0.0%
  6. Way too cheap

    0 vote(s)
    0.0%
  1. jalil

    jalil Oud bully Staff Member

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    Unfortunatly peoples always want what they cant afford.

    This is how the consumer society educates peoples.

    If people content themselves with what God would grant them their lives would be magnificent.
     
  2. Al Shareef Oudh

    Al Shareef Oudh Resident Artisan

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    The consumer decides that, similar to those who collect coca cola bottle lids as opposed to telephone cards. This is why it is important for the consumer to govern these decisions and drive the market.

    As far as a vendor is concerned or an artist, every one of their art works for them is a collectable item. For Al Shareef, every single oil we produce, goes through the same quality checks therefore from a quality standard they are all high quality, however from a scent perspective they differ. This is where it again comes back to the consumer, scent is subjective a consumer may decide to collect a low priced oil as opposed to high price.

    My personal view is that there are oils one wears daily, those can be from the ~ 150-300 range, then there are oils one wears weekly/monthly, they can range from ~350 - 600, then there are special occasion oils 650 and above, these and anything above them one might also choose to collect, and I want to be very clear, I do not condone use off oudh as an investment. What I am saying here is, collectable for its uniqueness and to pass to your kids or give as valuable gifts.
     
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  3. Ammar

    Ammar Oud Fan

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    @Al Shareef Oudh,
    But coca cola bottle lids don't have real objective value or let's say a manufacture value compared to oud that comes from the grade of wood, aging, the work labor consumed in distillation, the utilities and so on?

    Or this may lead to the conclusion that the final price tag for an oil is merely a sentimental value decided by the vendor not a reflection of the real expenses + reasonable profit margin which is a problem IMO.
     
    Last edited: Feb 25, 2017
  4. jalil

    jalil Oud bully Staff Member

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    @Al Shareef Oudh I follow you on this thought, the oud is more a patrimony for the future generations who probably will not have the chance to have today's quality ouds and still less those of the quality of yesterday. This is why I think it is important to keep the oud for his offspring more than for an eventual benefit
     
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  5. Al Shareef Oudh

    Al Shareef Oudh Resident Artisan

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    My example of the coca cola bottle lids was to illustrate the concept of collecting, not for it to be compared to oudh oil. Even if the cost of the lid is minimal it still has a production cost. But it is collected not because of the production cost, but because of the value it has to the collector, and this is why this category of collectable items is different to standard manufactured items, and it isn't exclusive, many times were hear standard production items becoming collectables because of the demand for them.

    The idea here is what creates the desire in the mind of the collector to have the item, it is most of the time removed from the cost to manufacture that item. You may have two pieces of art from an artisan, both cost the same to create, one will fetch a huge sum whilst the other wont. What I am highlighting here is, the collectable items are not a straight mathematical formula of direct cost + indirect cost + Profit. Like I mentioned earlier, there are collectors who will collect $15o dollar items, and would be happy to pay $1500 for that same item if that was the price tag, but the price tag is $150, that is upto the collector how much they value an item.

    hopefully that is clearer now.
     
  6. Ammar

    Ammar Oud Fan

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    @Al Shareef Oudh,
    I don't know brother there is a lot of debate in your posts, at least for the sleepy Ammar LOL!

    Maybe I would change my mind at morning, but the thing that I'm sure about it and would not change is that I would be super unhappy if I pay $1500 for an item with actual value of $150 and I have no problem in paying ++$1000 for the right item that has objective value mainly rather than merely subjective value decided by the artist or by myself, otherwise no oud can satisfy me the most only based on scent profile.

    There is no mention about this trend among venders that these expensive oils don't reflect somehow the expenses objectively including your offerings I guess, otherwise I would restrain myself from buying...
     
    Last edited: Feb 25, 2017
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  7. Oudamberlove

    Oudamberlove Member

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    Exactly how big is the demand for incense grade chips in China and the Gulf (ME)? Is oud oil production just a drop compared to the sales of chips? If the production of oud oil was more popular than incense grade chips, then there would be way more Artisan oil producers, and that would drive the price lower, then us Ouddicts will be happy campers with drawers full of Tola sized bottles of fine oud oil:):):)
     
  8. RisingPhoenix

    RisingPhoenix Resident Artisan

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    I generally don't like chiming in on these discussions as my words on the subject seem to be mis-taken at times. I've spoken on the subject many times before - usually in relation to the Cost of Manufacturing vs the Cost of Doing Business.

    Very rarely do I ever see this discussion talk about this Oud business - like the actual business that it is.

    It seems most of the discussion here focuses on "this oil costs this much because the wood used costs this much".

    2 vendors in particular I think are the reason most folks are thinking like this - and it kinda drives me a little nuts. It's very misleading, and sometimes it feels intentionally so. Here's why...

    There are multitudes of factors that go into pricing products - the cost of manufacturing is but one of those factors.

    Some other considerations...

    Money tied up in inventory. Most of us that distill oils - don't sell every drop of oil all at once. We don't spend money and then get it right back. Many have oils that don't completely sell out. Many get shelved to age. Others can take months or years to sell. This means that money is tied up in inventory. Hard to keep the wheels of a business turning when all your money is sitting on a shelf. Profits are needed to grease the wheels of progress.

    Every oil has a different Break Even Point. Technically - vendors don't even turn a dime of profit until the expense of manufacturing the oil and all its associated costs are covered. Whether it costs $1,000 or $10,000 to distill an oil - ZERO PROFIT has been made until that expense is recouperated. Profit Margins, therefore - are quite different than Profit.

    The Need for Lump Sums of Money.
    Sure, there is profit involved. But people mistakenly think that money goes straight into your pocket. Lump sums - often multiple lumps sums and usually needed close together - are needed to buy woods, pay bills - any number of expenses that businesses have - just so the business can plan and prepare to offer another product.

    Associated Business Costs.
    For those that aren't involved in running a business or don't own their own businesses...please understand that there are multitudes of expenses that have nothing to do with the Manufacturing Cost of a product. Businesses are black holes for money.

    Does anyone ever look at the profits big corporate businesses are taxed for? A company may make $100 billion in REVENUE - but their PROFITS may only be between $5-20 billion that gets taxed. Now, that's a lot of money, especially since we are talking about corporate giants and billions of dollars. But the important thing to notice - they only made 5-20% of PROFIT.

    Again - Profit Margin and Overall Profit are two entirely different things. Profit margins are necessary in order to cover the multitude of associated costs of providing a product.

    Please keep in mind that these are all factors that go into pricing a product. Yes, the cost of manufacturing or acquiring something is definitely a factor. Value is another big factor. "Quality" can mean a variety of different things to a variety of different people. At the end of the day - you like a product or you don't, and the amount that you liked the product may or may not justify how you feel having spent the money you did on that product. Value is a very difficult quality to assess.

    Every business has its formula for pricing products. Please please please don't get stuck on thinking that the cost of manufacturing is the only factor.

    One last thing that I will mention that I think is also a little bit misleading ...

    Some of the vendors have out right said that they don't rely on the money generated from their business to live. Those businesses have fewer costs, and their product prices will be lower as a result. Other vendors do indeed rely on their businesses to generate revenue on which to live. Their costs are higher. Most of us have multiple revenue streams because Oud alone does not pay the bills.

    Some vendors have million-dollar wood businesses. Or they own restaurants or other businesses that generate the revenue. Those people may not be struggling as much as they like to make it sound.

    The point of me mentioning these things is that the price of a product is much more complicated then I generally see being acknowledged or discussed.

    I would love for this topic to be discussed more broadly, and these other factors to be acknowledged and taking into account when looking at prices. It will help you understand why things are the way they are, and it will get your minds off of the inaccurate "cost of wood equals cost of oil" mentality.

    This was meant to be educational - so I hope everyone takes this as a conversational examination of some of the behind the scenes expenses that the vendors have to juggle, and take into account when pricing products.
     
    Last edited: Feb 25, 2017
  9. Habz786

    Habz786 Resident Artisan

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    Jk i enjoyed that you have maybe mentioned factors consumers are unaware of which vendors have to take into consideration when pricing oils. Theres more to it than just wood and pots and its only fair people are made aware of this before making a judgment. I think honesty is the key, fair trade Oud. Storys are better left for novels & tales or for those who enjoy a little bit of fictional exitment.
     
  10. RisingPhoenix

    RisingPhoenix Resident Artisan

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    I would say the demand is high. I am constantly competing against Gulf and China market buyers to get my hands on great woods - especially to sell as chips. The people that I work with often give me first dibs on woods. The problem is that they already know how much they can sell a piece or a lot to one of their other buyers. Which means we get stuck paying the prices those other markets command. Why sell to me @$10 or $12/g when they can get $15 or $20 (or sometimes $30 or $40 or more!) per gram to one of their other clients?

    The reality is, if you want great Wood - we're going to end up having to pay for it.

    This effects both our chips we sell as chips - and those we use to distill.
     
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  11. RisingPhoenix

    RisingPhoenix Resident Artisan

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  12. RisingPhoenix

    RisingPhoenix Resident Artisan

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  13. RisingPhoenix

    RisingPhoenix Resident Artisan

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    Some more articles that may be of interest.

    Please take note of just how many different variables and different formulary schematics there are for coming up with a price tag.
    *It isn't just the cost of the wood, as many have been led to believe* Where I come from, that is called Malarkey.

    Each business has different costs, and their own pricing schematics - which makes it VERY difficult to compare these specific products from different vendors (Oud and Agarwood) in a 1:1 kind of way. It's best to keep that in mind - cost and value are two different things. To quote one of the above articles,

    "The biggest mistake many businesses make is to believe that price alone drives sales. Your ability to sell is what drives sales and that means hiring the right sales people and adopting the right sales strategy. "The first thing you have to understand is the selling price is a function of your ability to sell and nothing else," says Lawrence L. Steinmetz, co-author of How to Sell at Margins Higher Than Your Competitors : Winning Every Sale at Full Price, Rate, or Fee (Wiley 2005) and a business consultant in Boulder, Colo. for 40 years. "What's the difference between an $8,000 Rolex and a $40 Seiko watch? The Seiko is a better time piece. It's far more accurate"¦. The difference is your ability to sell."

    Some more reading to enjoy:

    http://www.businessinsider.com/3-po...ies-businesses-should-always-consider-2013-10

    https://www.shopify.com/retail/120028547-9-strategies-for-profitably-pricing-your-retail-products

    http://www.marketingdonut.co.uk/marketing-strategy/pricing/seven-ways-to-price-your-product
     
  14. Mr.P

    Mr.P Super Moderator Staff Member

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    Thanks jk. I have to say though that I think folks generally do understand that it costs money to run a business - in fact I feel like this is a conversation we have explored before in detail.

    This is something shared by all businesses, so on a certain level it is totally irrelevant to someone buying oud. Some vendors are more efficient than others and so are able to reduce some of these costs and maybe pass those savings on to consumers. Some maybe have bigger or smaller profit margins based on how they manage all this stuff.

    In the end though consumers will be looking at price and quality and cannot really analyze all the variables that cause each vendor to price things however they do. I mean, it is sort of interesting to read the stories of risk and adventure and all that, but really if someone thinks a price is unfair, it will be based on what they believe to be a reasonable price in the market as a whole. No one in their right mind would begrudge a vendor the chance to make a living. But no one wants to be taken for a ride or paying high prices because someone has managed their business in a way that is not efficient or in a way that does not add any value proportional to the expense added as a consequence of the business plan or model or whatever.

    Some folks will sell good oud at reasonable prices, others won't. Vendors will be judged relative to one another and all we can actually assess is what we like, who is offering good value relative to other vendors, and what we can or cannot spend.

    I am reminded of something - I saw one post on another forum about a vendor being outraged that someone dared to ask for a discount (on account of how difficult and expensive it is to produce etc. etc.) but this is kind of "prima-Donna-ish". Consumers cannot assess this stuff. If a person's method of acquiring oud prevents them from offering a price a consumer wants to pay well... change jobs, find another way to get oud, find consumers with so much money they don't ask questions, whatever but don't get your knickers twisted because someone is trying to save money. We all work hard to make ends meet - it is no more reasonable to expect someone to give away oud at a loss than it is to expect consumers to just gratefully lap up whatever you offer them.
     
  15. Ammar

    Ammar Oud Fan

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    @Mr.P,
    You mean “Primo-Uomo-ish”, don't you? LOL!

    Aside from the literate joke, great post indeed…
     
    Last edited: Feb 27, 2017
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  16. F4R1d0uX

    F4R1d0uX Resident Artisan

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    You are right brother @PEARL I just paid 100$ for an oil from a seller listed here and my review is about to come ...
     
  17. Dorje

    Dorje Junior Member

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    Same old topic, would have thought people would get tired of whining...

    It really depends on how you look at it... overall, from a high level it can seem unreasonable but considering the current situation of wild wood being more difficult to find and it's value it makes sense. 10 years from now prices are likely to be much higher and AFAIK, it's been an exceptionally valuable substance throughout history, so my opinion is the current cost is what it is. There's no use complaining and whining about it. If other folks could offer it for less they will get a ton of business but oddly enough there doesn't seem to be any... imo the value relationship is pretty even among vendors... if you consider less expensive oils only a minor difference vs expensive than great, but it is subjective and personally I don't find lower grade oud worthwhile at any price, I'd rather wear a nice mukh/attar. To each their own...
     
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  18. Habz786

    Habz786 Resident Artisan

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    I don't think its a case of people whining but more so this topic has brought out interesting views from people about their feelings linked to the cost of Oud. Like with any market the cost of a product is always looked at and discussed. With many trusted vendors now we can see how and why a Oud is priced how it is whether it be due to raw material, age etc. Before the scene was quite limited to vendors so prices where pretty easy to i'll use the word control. With competition usually price is the first aspect that is affected and we have seen this happen and maybe those who thought Oud was overpriced may re-think. I agree there are many different angles to look at this and its not simple to just say Oud is overpriced, i'm sure the people who voted have some experience and knowledge on the product they love dearly and hopefully haven't just made a quick decision. Recently there have been some releases of quality Oud at great prices and we see more of these from trusted vendors for example Kyarazen's few releases, Imperial Oud's FH. Again this is so subjective to each person but overall the poll gives us an idea of how members who voted feel and that should be respected.
     
  19. F4R1d0uX

    F4R1d0uX Resident Artisan

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    Nuclear bro !
     
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  20. Ammar

    Ammar Oud Fan

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    @Dorje,
    I think you are in no position to generalize the term whining upon the buyers. There is difference between unreasonable whining than raising general awareness. There is difference between a vendor who is writing long posts about how to run successful business selling oud oil for $390/3g compared to another vender who was selling an oil for $165/3g of similar quality, same type of wood, same distillation year, and possibly from the same distiller, and between a vendor who is openly show and announce the price of the wood, the grade of wood, the distillation technique, and the yield selling the oil for $700/2.5g. The former business model I don't support the latter I wholeheartedly support despite the apparent high price tag.

    As I remember from BN, your taste in oud is more of Agar Aura type of oils, the airy delicate fleeting type of aromas, so you probably left with no more choices to choose from to satisfy your taste, but for the other buyers who are more broad in their taste or they just prefer the dense solid base oudiness type of oils they mostly have more options to look at and compare between each vendors price wise vs quality and probably would get better oil at better price in their opinion or even objectively.

    Plus what have @Habz786 posted...
     
    Last edited: Feb 27, 2017

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