A lot has happened over the last couple of years between Brexit, the pandemic and of course the ongoing turmoil that has led to sky-rocketing prices. It’s not surprising that brands are considering looking at ways to cut their costs, but is it worth it? Brand owners should look at it holistically without compromising product quality. Read more about becoming more cost-effective in our latest article.
What’s driving the desire to be more cost-effective?
Overseas brands bringing cheaper E-Liquids
It began with the influx of Chinese-manufactured disposable devices taking the UK by storm. At the time this didn’t worry E-Liquid brands as much but now there’s a growing shift towards E-Liquids once more, these same overseas brands are now beginning to import E-Liquids, not just disposables. Manufactured in China, these E-Liquids often are cheaper in price to produce.
Unfortunately, this opens the possibility for some products of questionable quality and unregulated E-Liquids, to arrive in UK markets. British-manufactured E-Liquids, like those manufactured by Xyfil, understand the importance of quality and follow GMP and ISO guidelines to ensure this quality is passed onto the products we produce.
Inflation across the market
Another influence on the cost and pricing of products has of course been inflation. Across the globe, countries are feeling the sting of inflated prices. In the UK, it was recorded at 11.1% in October, rising at the fastest pace in 40 years.
The UK’s cost of living crisis
This has also led to the cost-of-living crisis as inflation impacts the pricing of consumer products. With the rising costs of essentials, some items are becoming more of a luxury than some can afford. Because of this, consumers are looking to cut costs and spend less.
Is it possible to create a cost-effective brand?
Quality vs Cost
Making cuts to your brand to help lower costs can impact on the quality of your products. Sourcing alternative ingredients that are lower in quality or manufacturing overseas, can negatively impact your product and your brand overall. Studies have shown that consumers can tell the difference between brands that are shrinking or ‘skimping’ on their products due to inflation. The last thing you want for your brand is to lose the confidence of your consumers.
Cutting back and trimming down
That’s not to say there aren’t ways of trimming down that don’t impact on your quality. Some brands have already started looking at ways to remove unneeded packaging in an effort to cut prices. Removing the need for cardboard boxes would help remove part of the cost of E-Liquids, however, the need to adhere to regulations and provide warnings would need to still be fulfilled.
There are many options which would be great from a sustainability standpoint but do not necessarily equate to cutting costs. New technologies like linerless labels help to improve efficiency and lower costs, but the technology itself requires an initial cost.
Simplicity vs complexity
E-Liquid flavours can quickly tot up the costs when creating a new product range. The more complex a flavour, the more ingredients are used to create that exact flavour. Keeping things simple might not make you stand out in a crowd, but it helps to keep the price down.
Getting creative with limits
Often, a prestigious brand looks the way it does because of the finishes and special touches added to the product packaging. But creative brands can certainly make use of the ‘less is more’ approach and create eye-catching designs with simpler finishes. Setting a limit on the number of finishes and seeing what your designers can create will open more room for creativity.
Planning is key to managing costs
Leading on from this, it’s important to establish your plan brief with your manufacturer, and not just at the initial point of conception. Actively planning the details of your product from flavour to ratio to bottle size, to design and even how you wish to market it, can help tailor it to a more cost-effective product. Be honest and upfront with your brief to see exactly what your budget can achieve.
The pros of white label manufacturing
An option available for brands looking to create cost-effective products is white-label manufacturing. By selecting already pre-registered products to rebrand under your logo, not only do you save on compliance costs but benefit from high-quality products that are tried, tested, and approved.
Why you shouldn’t compromise products to cut costs
The Good-Better-Best (G-B-B) pricing approach
It’s a concept that many businesses have yet to touch on but those that have, see surprising benefits. What is G-B-B? The Good-Better-Best pricing approach is an option for businesses in which their product offering and pricing are tiered. This is often seen in the forms of products with ‘regular’, ‘plus’, and ‘super’ versions. This could be gadgets, subscriptions, consumables and more.
So perhaps the discussion shouldn’t be how you can make your brand cost-effective, but how your brand could make a cost-effective product part of your range.
Cost-effective vs Cost efficiency
It may sound the same, but they differ and can make a big difference in your products. Being cost-effective is predominantly about getting the task done adequately; in a way, you can think of this as the bare minimum to create your desired product. Being cost-efficient however is getting the job done the right way with the least amount of waste and optimising your available resources.
In terms of E-Liquids, the most cost-effective way to create a budget-friendly brand would be to establish a new product offering that focuses on simplicity and meeting consumers’ needs. Rather than complex designs across the packaging, garner more interest with simple designs and a finish that is eye-catching. Source locally and don’t compromise on product quality to ensure you don’t harm your brand’s reputation.
Choosing to be cost-effective is a sure way to end up compromising your products and your brand. But aiming to become cost-efficient may see some initial cost but is more likely to provide longer-returning benefits.