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Good news and sad news

by Rayna van Aalst November 20, 2018

Good news and sad news

I’ve got good news and I’ve got some sad news.

I’ll start with the good ones – we have drastically reduced the prices for most of our products.

The sad news is why I was forced to do this.

I wish we did this because of the upcoming holidays but that would be a lie.

The truth is that there is a price war going on in Europe and stores face two options - 1) lose margin by matching the competition, and 2) lose business.

Either way it’s a lose-lose situation and that’s why I’ve decided to speak up. I am afraid that if I don’t say anything about why we’re matching the prices other European stores have, very soon there will be a store that feels tempted again to go a few euros below the prices of what everyone else has and many stores will go out of business.

So how did we (as in the European market) end up in this ugly situation?

As always, it’s a delicate and complicated story but there are three important aspects to it.

1- Most US brands haven’t established selling prices for Europe

which means that any stockists chooses for themselves at what price they will sell. 

By the way, I say US brands as most of the brands we offer at Reina Organics come from the US but this could apply to any brand.

2 - although some brands have established selling prices for Europe, these prices are not respected and companies sell 20% and more below those selling prices.

This for me is the saddest part.

3 - If there are no selling prices established for Europe, the only guideline US brands is “Don’t sell below our US selling prices”.

But this is like comparing apples and oranges because the US selling prices exclude taxes and European selling prices by law are displayed inclusive of taxes (VAT).

For every item Reina Organics sells we need to pay 21% VAT to the tax authorities in the Netherlands. Same thing for every other EU country, only the percentage varies (still usually around 20%).

If you have ever ordered anything, not only skincare, but anything from the US or anywhere outside the EU, when you receive your order you need to pay VAT, if the value of your order is above €22. The only way to avoid paying taxes is for the sender to declare a lower amount of the goods you have ordered which I know many stores do but I’m not a fan of lying to the customs and tax authorities.

Either way we as a company must pay VAT to the tax authorities therefore we cannot just use the US prices and convert them to EUR because there is VAT which needs to come on top of the US price. 

For a very long time (years!) I chose not to participate in this price war

because I believe that my responsibility in our partnership with each brand goes beyond just selling their products. As a retailer I also represent that brand and contribute to their image. And playing price games is only damaging for the brand.

I have raised this subject on several occasions with our brands but for different reasons the situation didn’t change. (I admit it’s also a mistake of mine I didn’t press harder)

Unfortunately, because of this price war something so beautiful as green beauty and the brands we offer at Reina Organics has turned into a price hunt for their European fans, and distracts us all from the big picture - together we’re changing the industry and we’re reshaping how women see beauty.

Lastly, I completely understand why if you have the option to buy the exact same product you love cheaper somewhere else, you would do that no matter how much you love what we do at Reina Organics.

Rayna van Aalst
Rayna van Aalst


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