I don't think that you necessarily get better products by paying more. The most expensive mass market products are advertised a lot, and naturally the customer ulitmately is paying. L'Oreal spends about a third of its turnover on above the line advertising. This means that a big chunk of what you pay for one of their products get spent selling you the next one.
Having said that, some raw materials used in natural products are very expensive. Rose oil for instance can easily cost £2000 per kilogram at the moment and the price is rising.