Why Are Some Essential Oils So Cheap & Others So Expensive?

One question I hear a lot about essential oil prices is: “How come some essential oils are so cheap and others are so expensive?” In the following article it will come down to a few basic reasons for the low prices of some essential oils:

PipingRock-vs-doTERRA
  • They are blends of essential oil and a carrier oil
  • They are doctored with other substances.
  • They are really perfume oils and not therapeutic
  • …or the company selling them has a variety of other products and thus is not depending upon just essential oils for their company profits

On the other hand, the reasons for the higher prices of some essential oils, offered with great authority and assurance:

  • Only one brand of essential oil is therapeutic grade (thus explaining the high price)
  • Only one brand is certified organic therapeutic grade (again, explaining the high price)

Could there be another explanation for the difference in price?

Are cheap essential oils of poorer quality?

Does a higher price assure a better quality?

Essential Oil Prices: Reasons for MLM Essential Oil Prices Being So High

Most people have noticed that some essential oils, especially those sold through multi-level marketing companies, tend to have high prices. When the suggestion is made that the reason for their essential oil prices being so high is due to the fact that it is an MLM and therefore more people are getting a cut of the price, those who sell those expensive MLM essential oils tend to get upset.

As one doTERRA “Wellness Advocate” (a fancy way of saying “sales representative”) put it:

“I’m tired of hearing they cost more because they are an MLM. Having Wellness Advocates is just a way to market their oils. They do it that way so you can have someone help guide you on how to use the oils. They are complicated and you can’t simply put instructions on a bottle and put them on a shelf in a box store.”

She then goes on to say something I found rather uneducated:

“Also, when you are buying an essential oil that’s sitting on the shelf, don’t think that the cost of marketing that oil isn’t built in to the price. Companies spend billions of dollars on advertising to huge corporations, plus there are tons of middle men and transportation charges so the argument that they cost more because doTERRA is an MLM is just uneducated.”

The biggest advertisers of essential oils are MLMs. You’ll see more advertising for Young Living and doTERRA than any other essential oil. I’ve yet to see much advertising for NOW or Piping Rock essential oils, or for Eden’s Gardens or Plant Therapy.

True, much of that advertising is paid for by the individual sales reps…but it’s advertising and it goes into the price of the essential oils at the retail end.

What also made me laugh, while cringing, was her statement for why MLM sales reps were so important:

“...so you can have someone help guide you on how to use the oils.”

The problem with that statement is that most of the erroneous and dangerous suggestions on how to use essential oils are coming from Young Living and doTERRA sales reps!

Okay…back to essential oil prices.

Essential Oil Prices: Just the Facts

Of course, most of those explanations and reasons are all offered based on personal interest and no real knowledge of essential oils prices as determined by the international market, demand, growing conditions, transportation, and even politics. Just like the price of precious metals varies from day-to-day on the market, the price of essential oils will also vary.

If you want to know more about the intricacies of the essential oil market, please read the many reports on the International Trade Centre website.

Essential Oil Prices: From Supply to Source

Young Living loves to tout their “unique Seed to Seal” method of producing all of their essential oils, thus ensuring quality oversight from the time the seed is planted to the time the resulting essential oil is bottled. However, the truth is that they only own seven farms (based on information from their own website...although there are some rumors that they now actually own 13 farms); three in the United States, one in France, one in Oman, one in Peru, and one in Ecuador (where the other six are located is unknown).

The majority of essential oils come from places like India, China, Africa, Asia, Central America, Europe and many other places outside of those seven locations. Thus, Young Living must also purchase some of their oils from the same sources as other essential oils retailers.

NOTE: This is going to piss off some YL sales reps, but think, folks! There is NO WAY that YL can grow the amount of plant materials needed to produced the quantity of oils they sell on just 7-13 farms. Not only that, but some plants, the trees especially, take 30 years to get mature enough to produce the resins and barks needed to produce the oil.

For those that would say this information is "misleading" and "false" because they believe that YL produces ALL the oils they sell, here's a quote from David Stirling, the founder of doTERRA, an executive with YL before leaving due to differences of opinion about direction: "Of course we know the primary brokers that YL and others obtain their oils from. "

Notice, he said "brokers". In the article, he's not talking about where or how the essential oils are sourced, so he's not bashing YL. Read it yourself.

Essential Oil Prices: Pricing and Repackaging

From the time the plant materials are distilled or otherwise processed into an oil and packaged in large containers, often 55-gallon drums, to the time you buy that little 15mL bottle of essential oil, a number of stops occur. At each stop, the essential oil is rebottled into smaller and smaller containers.

  1. Importer – A number of these importers seem to be located in NJ and other states along the East Coast. They purchase by the 55-gallon drum, purchasing up to 50 or more drums in a shipment. (Here’s a thought, those drums of essential oil are shipped via container ship, through heat and cold, that can also impact the quality of the essential oil)

  2. Manufacturer – Purchases essential oils from the importer for use in cosmetics and other scented products, and to sell to larger branded essential oil companies. They will sell by the drum or in smaller bulk quantities, down to 25 gal.

  3. Essential Oil #1 Wholesaler – Will buy less than 55-gallon drums of the essential oil and rebottle in smaller wholesale sizes, but not sell anything smaller than one gallon quantities, and usually have a minimum wholesale order.

  4. Essential Oil #2 Wholesaler – Will buy large quantities (25-55 gallon drums of the essential oil), will rebottle and wholesale their own private label essential oils direct to retail outlets or to their own sales representatives. This would probably be Young Living and doTERRA, as well as other essential oils companies that sell a large volume of essential oils.

  5. Essential Oil #3 Wholesaler/Retailer – Will buy in smaller quantities, perhaps buying by the gallon, and rebottle and label for their own brand. They may also retail a wide variety of other products.







Piping Rock Health Products

Essential Oil Prices: A Study of Pricing Practices

As with many commodities, the more you buy, the larger the quantity, the lower the price. So it is with essential oils. The distiller/exporter sells in large quantities, such as by the kilogram in 55 gallon drums. Even then the price of a drum of any particular essential oil can vary greatly by country of origin.

For this study we’re going to look at five specific essential oils, some of the most commonly sold and used in the United States. These are speculations based on real import prices and an understanding of basic business pricing practices.


Price to Kg (varies by country of origin

Price to Kg (varies by country of origin

Price per 55-gal drum

6.59 kg in a 55 drum

Country

Low

Country

High

Low

High

Pelargonium Graveolens (Geranium)

UK

59.00

South Africa

253.00

388.81

1667.27

Lavandula Angustifolia (Lavender) Oil

France

30.00

Austria

87.00

197.70

573.33

Citrus Medica limonum (Lemon)

Italy

35.00

Italy

63.00

230.65

415.17

Pogostemon cablin (Patchouli)

Singapore

45.00

Netherlands

106.00

296.55

698.54

Mentha Piperia (Peppermint)

China

19.10

France

59.30

125.87

390.79

 

Table 1 – Import Prices of Five Essential Oils by 55-Gal Drums


With 3785.41178 milliliters (mL) to one gallon (gal), each 55-gal drum contains approximately 880 ounces (oz), or 208,197.6479 millileters. When you figure that most essential oils are retailed in 10 to 15 ml vials or bottles, you’ll see each 55-gal drum will produce almost 13880 15mL bottles of essential oil, or 252 15mL bottles per gallon.

Essential Oil Price: From a 55-Gal Drum to a 15-ml Bottle

Since essential oils are sold, or imported, by the kilogram, the chart below shows the price per kilogram and then the price per 55-gal drum. This is then broken down to price per pound and then the price for each 15mL bottle.



Price to Kg (varies by country of origin

Price per 55-gal drum

Price/pound

378 10ml per gallon - Cost per 10 ml bottle

6.59 kg in a 55 drum

Country

Low

Country

High

Low

High

Low

High

Low

High

Pelargonium Graveolens (Geranium)

UK

59.00

South Africa

253.00

388.81

1667.27

7.07

30.31

0.0180

0.0800

Lavandula Angustifolia (Lavender) Oil

France

30.00

Austria

87.00

197.70

573.33

3.59

10.42

0.0090

0.0270

Citrus Medica limonum (Lemon)

Italy

35.00

Italy

63.00

230.65

415.17

4.19

7.55

0.0110

0.0199

Pogostemon cablin (Patchouli)

Singapore

45.00

Netherlands

106.00

296.55

698.54

4.90

12.70

0.0129

0.0335

Mentha Piperia (Peppermint)

China

19.10

France

59.30

125.87

390.79

2.29

7.11

0.0060

0.0188

 

Table 2 – From 55-Gal Drum to 15 mL Bottles of Five Essential Oils

Essential Oil Prices: When the Importer is the Wholesaler/Retailer

Now when a company is large enough and has the funds to be able to order directly from the foreign source, they are going to make the most profit on those little 15 mL bottles of essential oils. Not only are they able to buy the oil in bulk, but they can buy those 15 mL amber bottles with caps, not just by the gross, but by the truckload; same for the labels.

Based on the chart above, if they are only paying 12 cents for the oil and less than two cents for the bottle and label, and then their cost for Geranium essential oil is less than 15 cents. 

Essential Oil Prices: Prices Vary Greatly

When you can compare essential oils prices between the top-selling essential oil retailers, and then look at what they might be paying for bulk essential oils, you’ll see that some companies are making a real killing.

15ml bottles

doTERRA

Young Living 

Barefut

EOX

Nature's Gift

Aura Cacia

Piping Rock

Pelargonium Graveolens (Geranium)

36.00

54.28

22.09

23.80

15.00

16.99

10.99

Lavandula Angustifolia (Lavender) Oil

28.00

30.92

22.09

16.99

24.00

12.29

3.29

Citrus Medica limonum (Lemon)

13.33

14.80

11.89

9.49

9.00

5.49

2.49

Pogostemon cablin (Patchouli)

39.33

44.41

21.84

10.68

12.00

19.70

7.49

Mentha Piperia (Peppermint)

27.33

28.29

16.99

9.29

8.00

8.99

2.79


Table 3 – Comparing Retail Prices of 15mL Bottles of Essential Oils

Essential oil retailers that sell in sizes smaller or greater than 15 ml.


Jade Bloom 10ml

Edens Garden 10ml

Starwest Botanical 10ml

Plant Therapy

Ananda Apothacary

Tropical Traditions

Mtn Rose Herbs 30ml

*Organic Infusions 5ml

(Geranium)

7.95

12.35

15.83

5ml    13.99

12ml  $50.23

 5ml       7.70

13.50

12.25

(Lavender)

7.95

6.25

9.25

10ml  11.99

12ml  $15.90

15ml    11.08

10.25

8.50

(Lemon)

5.95

3.45

5.17

10ml    6.44

12ml  $  4.95

15ml      6.35

5.50

5.50

(Patchouli)

6.95

4.95

8.17

10ml    6.99

12ml  $18.11

15ml      8.92

11.00

9.95

(Peppermint)

5.95

3.75

6.75

10ml    7.49

12ml  $  9.13

15ml    11.75

7.50

7.50


Table 4 – Comparing Retail Prices of Different-sized Bottles of Essential Oils

Based on the tables above, these companies are marking up their essential oils by 7300% to 38000%. This is based on the premise that each company is buying by the 55-gal drum of the most expensive oils. That is an amazing gross profit, especially when you figure that Walmart’s average profit margin is just 135%, and that most retail marketers shoot for at least a 200% mark-up or gross profit.

In fact, when I worked in the fine jewelry market I learned that the average mark-up for jewelry is about 600%.

Chances are good that the smaller companies are buying the less expensive oils, or are buying in smaller quantities. Still even a 7300% mark-up is a nice gross profit. 

Of course, this is not taking into account the operating costs that must be paid out of the gross profit from the essential oils' sales, nor do all essential oil companies have multiple levels of sales reps getting their cut.

 Essential Oil Prices: Conclusion

You cannot really judge the quality of an essential oil based on the price. Period.

Do your research. Read the reviews. Buy a less-expensive essential oil and try it. You might be really surprised to find like I did, that essential oil prices are not necessarily an indicator of essential oil quality.

NOTE:  These are not hard and fast figures, since shipping and the repackaging/rebottling costs will also increase the price companies pay for wholesale essential oils.