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.