Understanding Essential Oil Prices
I get asked all the time why there are such wild differences of essential oil prices. Since it can be hard to explain essential oil prices unless you know exactly which oils are being compared or specifically what the question is, I decided to write up this handy guide to help you figure this all out.
I will let you know why some oils are more expensive than others and also why the “same” oils differ in price between suppliers.
First, let’s look at why essential oil prices differ between suppliers.
Different Supplier-Different Price
To really understand how essential oil pricing works we have to look at a number of different factors. First, let’s look at why some companies charge more for pure essential oils.
If all pure essential oils come from the same plants why do some companies charge so much more? The answer lies in the sales method the company uses. Some companies, notably DoTerra and Young Living, use Multi-Level Marketing to sell their products. This means that the company sells to an upline distributor at a profit, then each person in the downline makes some profit off the sale. Obviously for everyone to make some profit in this type of company the prices will be higher.
It has been reported that the MLM model needs a markup of 16x cost to be profitable. That means for every $1 the product costs the company to buy, the retail price has to be $16. Multiply that by a cost of say $6 for the company and you are paying $96 to the rep you bought it from at retail.
The problem occurs when they try to tell you that they are the ONLY suppliers of pure essential oils to justify the high prices. This is totally false and misleading. There are many companies that supply pure and unadulterated essential oils that have been tested by independent laboratories and shown to be pure.
Don’t be fooled by the “we’re the only supplier of pure essential oils” statements to explain the higher prices. That’s simply a smokescreen to explain away the business model.
The other side of this is the rock bottom essential oil prices you see for some oils at discount stores and online. Many of these suppliers label their products as pure essential oils. Yet what they are actually doing is selling adulterated essential oils. They adulterate their products by using mostly carrier oils such as sweet almond or grapeseed oil and then add a small amount of the essential oil to make it smell like the real thing. They also sometimes substitute a similar smelling oil for the one on the label. An example is adding Lavendin to Lavender, or using rosewood in place of rose essential oil. They may even add laboratory produced constituents to extend the oils and make more profits.
I covered how to test to see if the oil you bought was adulterated in this video. This technique works for any oil except sandalwood, patchouli, vetiver, and German chamomile. Another quick test is to place a drop on the end of your finger and rub it between your fingers. It should not feel oily at all, with only a slight slip. If it feels oily it is most likely adulterated with vegetable seed oil.
For more on adulterated oils you can read this post.
Different Oils- Different Prices
Now let’s look at why oils from different plants may cost so much more than one another. This is another reason for differences in essential oil prices.
Remember, essential oils are distilled or extracted from parts of the plants they come from. They may come from the roots, wood, twigs or wood, the resin of trees, the leaves or the flowers. They are not really oils at all. They were given this name because they don’t mix with water, and the name stuck.
One reason prices vary so widely has to do with the scarcity of the plant. For instance, most sandalwood essential oil comes from Australia now because the sandalwood tree has become endangered in India. The trees are grown sustainably in Australia. However, since the oil comes from the wood and roots there are only so many trees that can be harvested yearly. The tree must be cut down to produce the oil, and it takes some time for the trees to grow. This makes it a relatively expensive oil when you buy pure unadulterated oil. However, if you look at some companies selling at giant online retailers they are selling Sandalwood oil at 2 oz. for around $16. Since the oil costs more to produce than that, and I can assure you they aren’t selling to you at a loss, the only way to sell you sandalwood oil at that price is to adulterate it. I cover that in more detail in the video linked above.
Another reason for different prices for different oils is the yield. Rose
Compare the prices of 15 ml bottles of Rose Otto vs. Lemon essential oils. A 15 ml bottle of lemon essential oil retails for $10.00. A 15 ml bottle of Rose otto essential oil retails for $850.00. You get a lot more yield of lemon oil from lemon peels than you get Rose otto oil from roses.
A few other examples of how much plant material it takes to make essential oils include:
- Peppermint- 600 lbs leaves and flowers for 2 lbs of oil.
- Tea Tree- 1,000 lbs of leaves and twigs for 18 lbs of oil.
Another reason for differing prices can be the labor required for harvest and distillation. In my rose example the roses also must be harvested by hand, and they have to be harvested in the early morning while the dew is still on them. Only enough roses can be harvested for the distillation process for that day. If they begin to dry out the yield of oil drops to negligible and the quality drops way down.
As you can see, there are a number of reasons for the differences in prices between oils from different plants and also soils from different companies.
I hope this has helped you to understand the pricing better. My hope is that it will help you make an informed choice when choosing to buy essential oils. If you simply want to enjoy the scents of essential oils then buying a less expensive option might be OK for you.
If you want to experience the therapeutic benefits then it is important that you choose a 100% pure and unadulterated essential oil for your purposes. I won’t ever tell you we are the only supplier of pure essential oil. But I will tell you that the oil we offer is 100% pure and is of the highest quality.
If you have any questions about essential oils feel free to contact us. Please leave us your thoughts in the comments section.