Quantcast

Cost of goods

SoapMakingForum

Help Support SoapMakingForum:

mx6inpenn

Well-Known Member
Joined
Jan 4, 2015
Messages
602
Reaction score
608
Location
NW Pennsylvania
I've been working on reducing my cost per bar in anticipation of selling in the next year. My cost of materials has been $1.30-1.50 per bar as a hobbyist picking oils up at the grocery store. Pricing things in larger quantities from suppliers, I've got that down to about $.75-.95 with 7# bottles for most items. I know I could reduce it more with 40-50# containers, but that just isn't feasible starting out from my point of view.

I'm wondering how this cost compares to others, and also if my perspective on larger quantities is incorrect. My main reasons for thinking it might not be feasible are storage and cost-return. I could make room to store large containers, just would probably be in the garage. For cost-return, its a good sized chunk of change to put out for a beginning business with no idea when I would see a return. Also there is then the worry of wasting oils that aren't used quickly enough.

I'd appreciate any input y'all can provide!
 

cmzaha

Supporting Member
Joined
Sep 19, 2011
Messages
11,749
Reaction score
11,050
Location
Southern California
My first questions is how you are making a fragranced bar of soap for $.75-.
$.95 per bars. I sure cannot do it. Cost of goods would include colorants, Fragrancing is a biggie, every oil and additive including purees, milks, salts etc, labeling, packaging, then we get to insurance, booth space, electricity, car gas etc...and the list can go on. I have never been able to get a bar under $3 or much under, which I sell for $7 and purchase in bulk
 
Last edited:

CTAnton

Well-Known Member
Joined
Feb 13, 2015
Messages
786
Reaction score
501
Location
Connecticut
I made a bunch of soaps for a woman who wants to felt them. nothing special....70% olive oil(Costco) coconut oil(bulk) and castor oil(bulk). I ran the numbers like I had never done before...2 loaves fragranced, the third fragrance free. By doubling my costs I came up with just shy of $3.00 per 4.5-5.0 oz. bar....and thats without labeling and packaging!
 

Stacyspy

Well-Known Member
Joined
Apr 8, 2015
Messages
522
Reaction score
579
Location
Missouri
I don't have my exact numbers handy- they're out in the shop... I get excellent deals on oils and lye from our local Amish, but once I add the FO cost, it brings me to about $1.25 a bar...and that's only if I don't use any milk, salt, sugar, or oils other than OO, CO, lard, and castor. My regular go to recipes average out to $1.50- $1.75 per bar.
 

Kamahido

Paladin of Soap
Joined
Oct 3, 2015
Messages
1,041
Reaction score
619
Location
Wyoming, MI
I make my unscented bars for $0.63 each. My normal "fragrance" bars are $1ish (depends on additives and scents). Cost of fragrance is huge!
 

cmzaha

Supporting Member
Joined
Sep 19, 2011
Messages
11,749
Reaction score
11,050
Location
Southern California
I don't have my exact numbers handy- they're out in the shop... I get excellent deals on oils and lye from our local Amish, but once I add the FO cost, it brings me to about $1.25 a bar...and that's only if I don't use any milk, salt, sugar, or oils other than OO, CO, lard, and castor. My regular go to recipes average out to $1.50- $1.75 per bar.
Also without packaging I would guess...
 

mx6inpenn

Well-Known Member
Joined
Jan 4, 2015
Messages
602
Reaction score
608
Location
NW Pennsylvania
Sorry, I said cost of goods in the thread title and cost of materials in the body. Cost of materials is what I am looking at.

I tend to fragrance fairly lightly at 3%. At $2.50/oz, it works out to $3.75/6# batch or $.19/bar.

I rarely use colorants in even half of my batch, so I don't use a lot of mica, about a tsp in most batches. The most colorant I've used is for dragon's blood, but I only use mica in a small portion with ac in the rest, which is cheaper. Two types I will carry as staples due to popularity have no colorants.

Most of my soaps only have sugar as an additive. OMH has all 3 of it's namesakes, but no colorants, so that helps a bit with it's cost. Salt bars are the only ones I use salt in. The only other additive I use is a vanilla bean that cost $.50, also in a batch with no colorants.

I use a high percentage of lard in most of my recipes. If there is a cheaper oil, I don't know what it is! I haven't run the numbers on a vegan recipe yet because I'm still testing those, but they will have higher cost due to the oils.

I did forget about packaging, mostly because right now I don't typically use any. I'm leaning toward a cigar band, which is one of the cheapest options.
 

Stacyspy

Well-Known Member
Joined
Apr 8, 2015
Messages
522
Reaction score
579
Location
Missouri
Also without packaging I would guess...
Packaging is the bane of my existence...lol... Right now, I'm using a shrink wrap band, a 2x4 vellum sticker on the front, a vellum address size label on the back, and my inkjet printer. I haven't actually figured the pricing, but I'm pretty sure it's temporary until I come up with something I like more.
 

cmzaha

Supporting Member
Joined
Sep 19, 2011
Messages
11,749
Reaction score
11,050
Location
Southern California
Sorry, I said cost of goods in the thread title and cost of materials in the body. Cost of materials is what I am looking at.

I tend to fragrance fairly lightly at 3%. At $2.50/oz, it works out to $3.75/6# batch or $.19/bar.

I rarely use colorants in even half of my batch, so I don't use a lot of mica, about a tsp in most batches. The most colorant I've used is for dragon's blood, but I only use mica in a small portion with ac in the rest, which is cheaper. Two types I will carry as staples due to popularity have no colorants.

Most of my soaps only have sugar as an additive. OMH has all 3 of it's namesakes, but no colorants, so that helps a bit with it's cost. Salt bars are the only ones I use salt in. The only other additive I use is a vanilla bean that cost $.50, also in a batch with no colorants.

I use a high percentage of lard in most of my recipes. If there is a cheaper oil, I don't know what it is! I haven't run the numbers on a vegan recipe yet because I'm still testing those, but they will have higher cost due to the oils.

I did forget about packaging, mostly because right now I don't typically use any. I'm leaning toward a cigar band, which is one of the cheapest options.
Yes, I was going with the Thread Title
You may want to reconsider fragrancing lightly at 3% when selling. If you stick with that scenario you are risking ending up with a lot of un-sellable soaps. 9.5 out of 10 customers like heavy fragrance. In an open air market they cannot smell light fragrances. Packaging and labeling costs more than one would think. Cigar bands fall off during packing and un-packing, when the soaps shrink and open soaps get very dirty and markets. Many of my customers have mentioned they will not purchase bare soaps. Vegan soaps can be no more expensive if you use 100% palm shortening or homogenized palm oil. When you start selling in markets you will find people asking for many diffenent things. Many are suprised when I have what they are looking for. Just something to think about. People ask for kelp, clays butters, oatmeal, no palm, no coconut, no olive and this is just a tiny list. Variety is the key to success when selling
 

Susie

Supporting Member
Joined
Aug 1, 2013
Messages
9,673
Reaction score
9,143
Location
Texas
Yes, I was going with the Thread Title
You may want to reconsider fragrancing lightly at 3% when selling. If you stick with that scenario you are risking ending up with a lot of un-sellable soaps. 9.5 out of 10 customers like heavy fragrance. In an open air market they cannot smell light fragrances. Packaging and labeling costs more than one would think. Cigar bands fall off during packing and un-packing, when the soaps shrink and open soaps get very dirty and markets. Many of my customers have mentioned they will not purchase bare soaps. Vegan soaps can be no more expensive if you use 100% palm shortening or homogenized palm oil. When you start selling in markets you will find people asking for many diffenent things. Many are suprised when I have what they are looking for. Just something to think about. People ask for kelp, clays butters, oatmeal, no palm, no coconut, no olive and this is just a tiny list. Variety is the key to success when selling
This is marvelously helpful, Carolyn! Loaded with vital information! Thank you!
 

cmzaha

Supporting Member
Joined
Sep 19, 2011
Messages
11,749
Reaction score
11,050
Location
Southern California
This is marvelously helpful, Carolyn! Loaded with vital information! Thank you!
Sorry I strayed off the main topic, but thankyou, hopefully it helps some. I see people that do not even take enough inventory to make booth space and I just walk past shaking my head. Booth space here averages most markets will run in the $50 range for a 4 hr market.
 

The Efficacious Gentleman

Lifetime Supporter
Joined
Nov 19, 2013
Messages
8,980
Reaction score
9,066
Location
Austria
I think that you should already be thinking in terms of total cost rather than just materials, as one of the biggest costs is time.

The cost of a bar includes the time taken to make the soaps, clear down afterwards, cut, rack and wrap the soaps. You should also include a portion of the location costs for all that, too - rent, power, heating, water.

Time is a "low hanging fruit" for reducing costs. It doesn't take twice as much time to make a batch twice as large as you plan to, which reduces the cost per bar considerably.
 

cmzaha

Supporting Member
Joined
Sep 19, 2011
Messages
11,749
Reaction score
11,050
Location
Southern California
I think that you should already be thinking in terms of total cost rather than just materials, as one of the biggest costs is time.

The cost of a bar includes the time taken to make the soaps, clear down afterwards, cut, rack and wrap the soaps. You should also include a portion of the location costs for all that, too - rent, power, heating, water.

Time is a "low hanging fruit" for reducing costs. It doesn't take twice as much time to make a batch twice as large as you plan to, which reduces the cost per bar considerably.
Problem is so many hobby soapmakers do not worry about all the above, which is included the the cost of making the soap. I see soapmakers selling soaps for 4.50 per bar. There is no way they are making money they are just trading for supplies and doubt it supports the supplies. I make some specialty bars that I sell for $10 to help balance the bottom line. It is a lot easier to lower a price versus raising the price
 

mx6inpenn

Well-Known Member
Joined
Jan 4, 2015
Messages
602
Reaction score
608
Location
NW Pennsylvania
Yes, I was going with the Thread Title
You may want to reconsider fragrancing lightly at 3% when selling. If you stick with that scenario you are risking ending up with a lot of un-sellable soaps. 9.5 out of 10 customers like heavy fragrance. In an open air market they cannot smell light fragrances. Packaging and labeling costs more than one would think. Cigar bands fall off during packing and un-packing, when the soaps shrink and open soaps get very dirty and markets. Many of my customers have mentioned they will not purchase bare soaps. Vegan soaps can be no more expensive if you use 100% palm shortening or homogenized palm oil. When you start selling in markets you will find people asking for many diffenent things. Many are suprised when I have what they are looking for. Just something to think about. People ask for kelp, clays butters, oatmeal, no palm, no coconut, no olive and this is just a tiny list. Variety is the key to success when selling
Thank you for taking the time to address these things! I hadn't thought about the lighter scents being an issue outside. I don't plan to do many outdoor events, but not none! I do tend to prefer stronger scents to begin with, such as dragon's blood and vanilla, so that may make a difference. Lighter scents like citrus I use 5% for.

I like cigar bands for the simplicity and not using plastic. The other thing I was considering was shrink bands, because of the dirt, dust, grimy hands, and icky noses. I'll have to price and order some tomorrow to try out.

I do think I have a decent variety of options, without going overboard from the start. I technically will have several vegan soaps, but will only market 1 that way. All of my soaps meet the palm free, 3 will be vegan, 1 olive oil free, 1 with oatmeal, 1 with beer, 1 with lots of ac, 2 with butters. I will need to order some babassu to play with for coconut free in addition to castille. I was planning 8 staples plus 2 limited time/seasonal.

I think that you should already be thinking in terms of total cost rather than just materials, as one of the biggest costs is time.

The cost of a bar includes the time taken to make the soaps, clear down afterwards, cut, rack and wrap the soaps. You should also include a portion of the location costs for all that, too - rent, power, heating, water.

Time is a "low hanging fruit" for reducing costs. It doesn't take twice as much time to make a batch twice as large as you plan to, which reduces the cost per bar considerably.
Thanks Gent! I focused on the materials initially because I can't see doing this as more than a hobby if I can't reduce my material costs enough to make it worth the effort. I know the average price of a 4-5oz bar in my area is $6 and that means being able to make it for $.75 in materials to fit most of the models I've seen. I do plan to up my batch sizes over the next several months. One batch at the current size doesn't take me much time anymore since I masterbatch lye and oils for a couple recipes. When its something I've made the same way numerous times, its well less than an hour total time involved. I'll be able to reduce that more purchasing larger quantities because I will be able to mb more at one time.
 

Susie

Supporting Member
Joined
Aug 1, 2013
Messages
9,673
Reaction score
9,143
Location
Texas
I am straying a bit from the subject, but do y'all use a specialized computer program to figure all the costs and such?
 

The Efficacious Gentleman

Lifetime Supporter
Joined
Nov 19, 2013
Messages
8,980
Reaction score
9,066
Location
Austria
I am straying a bit from the subject, but do y'all use a specialized computer program to figure all the costs and such?
I use Excel for now, but I am building an Access database to track things better. That said, I think $100 for Soap Maker 3 Pro is probably a better investment than the time it's taken me!
 

penelopejane

Well-Known Member
Joined
Sep 19, 2015
Messages
5,398
Reaction score
4,132
Location
Sth Coast, NSW, Australia
I use Excel for now, but I am building an Access database to track things better. That said, I think $100 for Soap Maker 3 Pro is probably a better investment than the time it's taken me!
Soapmaker 3 is excellent. Pretty easy to use (though would be a breeze if you set it up from the beginning rather than putting all purchases in months after you started!!).

It also has a soap calculator in the program (the SG ratios are a bit different to soap calc so you have to play a bit to work out what lye concentration you want for your mix).

When you enter your recipe it automatically calculates lye etc and tells you how much it cost including packaging or anything you want.
It automatically tracks supplies and sold or discarded batches.

There is an online users group with a great knowledge of the program and access to the developer himself.

No I'm not related to the owner but I really appreciate the program. Not just for people who sell but for people who want to track costs.
 
Last edited:
Top