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In the interest of controlling costs, some of these fragrance companies are cutting corners, simultaneously undercutting and jeopardizing the reputations of legitimate fragrance houses that are trying to create safe, compliant and wonderful-smelling scents. These bad actors quote ridiculously low prices and use materials that are not safe or regulated or are perhaps even processed improperly. This can pose significant problems for the customer.
The issue of corner cutting is particularly relevant now. When one sees a downturn in the economy, the first reaction is for customers to start cutting costs. They will often start making changes such as reducing higher-end product lines or cutting the amount of fragrance they put in their products. The vast majority of the products in consumers’ homes are fragranced. They may change brands for a time, but they will still buy fragranced brands. But in tough times, customers may well ask fragrance houses to cut costs. I’ve had clients tell me that they’re hurting across the board: “We’re paying $12/lb and we want you to get that fragrance down to $8/lb.”
Threats to High Quality Fragrances
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This is an issue of quality and good service. All of our clients want quality fragrances, and they expect us as fragrance houses to provide them. A raw material account executive in the industry recently told me that customers, particularly in the “all-natural” realm, routinely deal with suppliers promising organic materials that are in reality processed in close proximity to contaminants such as pesticides. The cross-contamination is extensive.
It’s not only the clients that are hurt. Our industry’s reputation is at stake, particularly now when consumers are jittery over the perception that China doesn’t follow the same regulations as the West. The worry is that we don’t really know what we’re getting half the time. No one wants bad materials coming from overseas or anywhere else. Yet, to create some of these cut-rate fragrances, some houses are sourcing materials from unvetted suppliers. These materials may be off-spec, byproducts or leftover materials—what they call the “ends” or the “tails” versus the true quality raw material. We don’t want companies telling customers, “You know that fragrance that you’re currently buying, we can do it for half the price,” but what they don’t tell the clients is that they can do it cheaper because they’re not using the same materials. The quality of a fragrance house is directly related to the security and quality of its supply chain.
Other topics discussed: The Customers’ View; Consequences; Customer and Supplier Insights on Quality