Why Are Perfumes at Ross So Cheap?

Ross Dress for Less, a popular American off-price retailer, is known for selling a wide range of products at significantly lower prices than traditional department stores. Among its offerings, perfumes are a standout category that attracts many customers. The prices for perfumes at Ross are notably lower, often causing customers to wonder, "Why are perfumes at Ross so cheap?" This article will delve into the reasons behind this, exploring factors like sourcing strategies, product types, and market positioning.

1. Sourcing Strategies and Overstocks
One of the primary reasons why perfumes at Ross are so cheap is due to the company’s sourcing strategy. Ross buys overstocked and excess inventory from manufacturers, department stores, and other retailers at heavily discounted rates. When a manufacturer produces more products than they can sell, or a retailer ends up with excess inventory, they sell these products to off-price retailers like Ross at a fraction of the original wholesale price.

This method allows Ross to acquire perfumes from well-known brands at prices significantly below what these products typically cost. These savings are then passed on to customers. For example, if a perfume brand launches a new line, it may need to clear out older stock to make room for the new collection. This surplus inventory often ends up at Ross, available at a much lower price than in mainstream stores.

2. Closeouts and Seasonal Changes
Closeouts and seasonal changes also contribute to the affordability of perfumes at Ross. A closeout occurs when a manufacturer discontinues a product or packaging design. The existing stock of these items is sold off at reduced prices to clear the shelves for new merchandise.

Perfumes, like many other products, are often subject to seasonal changes and trends. Fragrance brands may introduce new lines with different packaging, scents, or formulations based on seasonal preferences, such as lighter scents for summer and warmer notes for winter. When these changes occur, older stock needs to be moved quickly, creating an opportunity for Ross to purchase them at a reduced price.

3. Packaging and Batch Variations
In some cases, the perfumes sold at Ross may come in different packaging or be part of older batches. While the scent itself may not differ significantly from what is sold in high-end stores, the packaging might not be the latest design, or there may be slight differences in bottle size or shape. These variations do not affect the fragrance quality but allow Ross to sell these items at a lower price point.

Perfume companies often update their packaging to keep up with marketing trends or rebrand their image. The old stock, even if the perfume inside is the same, is considered less desirable by traditional retailers and is often sold to discount stores like Ross.

4. Smaller Bottles and Tester Sizes
Ross often sells perfumes in smaller bottles or as tester sizes. Testers are products intended for display purposes at department stores. They are typically the same quality as the retail versions but come without the fancy packaging, like boxes or decorative caps. Retailers may sell these testers at a lower price to off-price retailers.

Smaller bottles also make perfumes more affordable. A 30ml bottle of a designer fragrance, for instance, is cheaper than a 100ml bottle, even though it might be the same scent. Ross can offer these smaller bottles at a price point that is more accessible to a broader range of customers.

5. No Advertising Costs
Another key reason why perfumes at Ross are cheaper is the lack of advertising costs. Ross Dress for Less does not spend as much on marketing and advertising as high-end department stores do. Luxury brands invest heavily in advertising campaigns, endorsements, and promotional events to create a sense of exclusivity and desirability around their products.

However, when these products reach off-price retailers like Ross, they are sold without the associated costs of advertising and branding. This reduction in marketing expenditure allows Ross to keep prices low.

6. The Psychology of Off-Price Retail
Off-price retailing is built on a unique psychological model that encourages customers to feel they are getting a deal. Ross uses a “treasure hunt” strategy to attract customers. When shoppers enter a Ross store, they are not sure what they will find, and this uncertainty can make the shopping experience exciting.

This model is effective in encouraging impulse buying, as customers perceive they are getting a high-quality product for a significantly lower price. The perfumes might be older stock, have different packaging, or be surplus inventory, but they are perceived as a bargain, which aligns with Ross’s value proposition to its customers.

7. Lower Overhead Costs
Ross also benefits from lower overhead costs compared to luxury department stores. High-end retailers have to maintain an upscale store environment with premium locations, high salaries for specialized staff, and significant expenses on visual merchandising and customer service.

Ross, on the other hand, operates in more modest locations, keeps store decor minimal, and employs a smaller number of staff per store. This lean operational model allows Ross to pass on savings directly to customers in the form of lower prices.

8. Supply Chain Efficiency
Ross's efficient supply chain management also contributes to the low prices of perfumes. The company has a strong distribution network that allows it to rapidly move products from suppliers to stores. This efficient handling reduces storage time and costs, which in turn helps keep prices down.

Ross’s supply chain strategy is built on flexibility and speed. By maintaining strong relationships with suppliers and having a responsive logistics network, Ross can quickly adapt to market changes, procure discounted inventory, and distribute it across its network of stores efficiently.

9. Limited Selection and Fast Turnover
Unlike department stores that carry a full range of a brand’s offerings, Ross has a limited selection, which allows them to focus on items that can be sold quickly. The limited selection also helps reduce holding costs since products are turned over more rapidly, reducing the amount of time inventory sits on shelves.

The fast turnover means that perfumes at Ross do not sit long enough to incur significant holding costs, enabling the retailer to sell them at lower prices. The constant influx of new inventory also keeps customers returning to see what new items have arrived.

10. Appeal to a Price-Sensitive Demographic
Ross's customer base is generally more price-sensitive, and the store is designed to appeal to value-conscious shoppers. By offering high-quality perfumes at a fraction of the price found in high-end department stores, Ross meets the needs of its target demographic while maintaining a competitive edge in the off-price retail sector.

Ross shoppers are often looking for deals and discounts, and the lower prices on perfumes align perfectly with this expectation. The combination of quality products at reduced prices creates a value proposition that is hard to resist for many customers.

Conclusion
The low prices of perfumes at Ross are the result of a combination of factors, including strategic sourcing of overstock, closeouts, and excess inventory; packaging and batch variations; smaller bottle sizes; the absence of advertising costs; lower overheads; and an efficient supply chain. Additionally, the psychological appeal of off-price retailing and a fast inventory turnover strategy make perfumes at Ross an attractive choice for price-sensitive customers.

In summary, the affordability of perfumes at Ross can be attributed to a unique business model that combines operational efficiency, strategic purchasing, and an understanding of its customer base. This approach allows Ross to offer genuine fragrances at prices that are hard to beat, providing customers with the opportunity to purchase luxury scents without breaking the bank.