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Vrishank Raj
VC enthu • 1d
𝗦𝗼𝗺𝗲 𝗿𝗮𝗻𝗱𝗼𝗺 𝘁𝗵𝗼𝘂𝗴𝗵𝘁𝘀 𝗼𝗻 𝘁𝗵𝗲 𝘀𝗸𝗶𝗻𝗰𝗮𝗿𝗲 𝗮𝗻𝗱 𝗰𝗼𝘀𝗺𝗲𝘁𝗶𝗰𝘀 𝗶𝗻𝗱𝘂𝘀𝘁𝗿𝘆: Skincare and cosmetics products often have very high gross margins (read: typically above 60%). These margins are then channeled into retail markups, customer acquisition costs (CAC), and expensive celebrity endorsements. This inflates prices, making such products inaccessible to a large segment of the population. If a brand can figure out how to significantly reduce CAC, it opens the door to selling at more affordable price points and in doing so, capturing a much larger market share. However, there's a catch. Pricing products too low might lead to consumers perceiving them as cheap or ineffective. Building trust with consumers becomes essential when you're trying to sell high-quality products at lower prices.
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