Last week sex toy pricing was twice the topic on Twitter: British gay sex shop Clonezone announced a sale up to 75% which lead to a little shit storm because people felt they Clonezone would generally overcharge them. Later this week, Twitter user DiggerPup responded to my review of the Mister B Nipple Claws that you could get the barrels off eBay as diamond prongs for around £3.50 instead of the £30 Mister B charges for the sex toy. Since both topics are somewhat related and the topic of sex toy pricing is a constant one in my reader questions, I decided to blog about it today.
Running a business creates a lot of costs beyond the purchase price of the goods sold: Rent, insurance, capital costs, wages, income and value added taxes and many more. When the business manufactures own goods, the prices for workshop equipment, defective work and research & development also needs to be priced into the product price. If you are a multi-channel retailer (which means running an online and a brick & mortar business at the same time), your prices have to have a mixed calculation: Being competitive towards other online retailers, being the same offline and online and still covering the costs of stationary stores (for example store rent in the gay district which – especially through gentrification – is generally higher than the rent in an industrial estate).
While all retails have to cover these costs, kinky products come with the same challenges as luxury goods: They are not essential needs but part of the self-actualization so among all the other purchase possibilities they generally speaking rank amid the lowest in priority. Furthermore, once bought, the likelihood of purchasing a similar good again soon, is low compared to other products. So all the costs mentioned above need to be covered by products which are not bought often and are marketed to a niche.
For that reason, the profit margin of most kink products compared to luxury goods which ranges between 60% and 150%. This sounds like a lot, but if you take off the value added tax (in percentage points!) and take into consideration that the average receipt is relatively low because the most common purchases are cockrings, nipple clamps and lube, the profit is not that high.
So, how does this relate to the two opening examples? First let’s talk about the Clonezone sale. The initial tweet read “Up to 75%”. The word “up” is important. I went to webpage linked in the tweet on Jan 21st at 6pm and the average discount over all offers was 26.11%. At an average cloth retailer you will get a bigger discount rate at an end of season sale. Looking at the profit margin from the last paragraph and taking into consideration the VAT, the products are not that outrageously overpriced as the 75% discount would imply but priced margin-wise in the neighborhood of average department store or luxury products.
The Mister B Nipple Claws are actually a good example to illustrate why kink products are not as overpriced as they first might appear. If you wanted to make your own Nipples Claws you would need two diamond prongs which cost £9 including shipping and chain and the two bails for approx. £2. The labor time for drilling, deburring and soldering will take about 10 minutes which will cost approx. £4. So a self-made Nipple Claw would cost you £15 – not including tool depreciation and maintenance costs, the labor costs for purchasing the materials and the hypothetical costs of defective work. Taking into consideration scale effects, the Nipple Claws will have a purchase price for Mister B of £10. But Mister B is not only a multi-channel retailer, but also a wholesaler. They need to price their products so they can sell it to other retailers with a profit and they must be able to make a profit covering all the costs of their own business.
While I am on the subject, I want to address a third aspect I often get asked: Why are toys from Bad Dragon, Square Pegs or Oxballs so expensive? Why buy the original products from Mr S or Regulation when there are cheaper version of them from Asia on eBay?
- Raw Material Price: Premium sex toy maker use premium, but thus more expensive materials. Silicone for example needs a catalyst which can be the inexpensive metal lead. But for humans, lead is an highly toxic material so body-safe products should use the catalyst platinum which naturally is more expensive. Most leather from Asia is dressed in a way which does not satisfy European or American safety standards. Potentially dangerous chemicals and processes are used among which the Chrome-6 allergy is the most common yet the most “harmless”. Since most leather pieces designed for BDSM are worn on the bare skin, these chemicals are more easily absorbed through body warmth and sweat than when the leather is used to make a cheap leather jacket which has a cloth lining.
- Liability Risks and Customer Loyalty: The potential harm through cheap raw materials is only one part of potential liability risk. When selling bondage gear for extremer scenes like suspension, the production quality has to be so good, that an avarage piece being sold must be able to good enough to satisfy safety requirements even when assesed in court.
Because established companies have become a brand of their own. The customer expects a certain level of product quality. Otherwise through the small size of the kink community, a bad reputation quickly spreads which can easily get a company into big economic troubles. This kind quality control causes higher costs through more thorough manufacturing, quality testing of samples or all products and higher cull.
- Lack of scale effects: Most kink products are not made in large quantities. A type of bondage gear is usually only manufactured two or three pieces at a time because the capital tie-cost would be too high to produce them in bulk and just store them. Through the large number of different color and pattern options, firmness degrees and extras, each Bad Dragon toy is individually made. Despite the basic technique of making leather or polymer toys is the same, there is no real chance of gathering much experience making the individual model so there are only little scale effects (for example increased manufacturing speed and reduction of defective work).
Labor costs: These companies are usually located in the western world and there in areas with high living costs like London or LA. Through social security systems and generally high living costs than in developing countries, the labor costs of skilled craftsmen like leather tailors are considerably higher causing higher product prices.
- Research and Development: The more elaborate the product, the more complex the design process is going to be. For example: Oxballs uses 3D printer to rapid prototype their new toys, Bad Dragon has an entire community dedicated to product design, not to talk about how difficult it is to create a sowing pattern for ergonomically designed bondage gear. All these efforts to design new products costs time and thus labor, sometimes required special equipment (3D printer, CAD programs, etc.) and expensive raw materials.
I know that sex and kink toys are expensive and that there are always more toys a kinkster wants than he can afford. But I hope this little blog entry illustrated well why the products we perverts yearn for are most of the time worth the price in the store.