When calculating the cost of your ingredients are you including the cost of shipping? The easiest way of doing this is on a dollar per dollar basis. You take the cost of shipping and divide it by the sub-total of the items your are ordering ($17.53 / 67.89 = $0.2582118132272794). You then multiply that by the total cost of the item ($38.00 x 0.2582118132272794 = $9.812048902636618). Then you add that to the total cost of the item ($38.00 + 9.812048902636618 = $47.81204890263662). They you divide that by your unit of measurement ($47.81 / 200 = $0.24). So my actual cost per soap box isn't $0.19, it's $0.24.
To calculate the cost of volume on items sold by weight, you have to weigh the volume. So how much does a tablespoon of Sodium Lactate weigh? How much does a teaspoon of Mica weigh? This is one of the things I love about SoapMaker3...it does these calculations for me.
So...when calculating your costs you start with your Base Oils, Lye/Water and your standard Additives (like Sodium Lactate or Kaolin Clay or Tussah Silk, etc). For me, (10-4.5oz bars) that's $0.87 a bar (it should be noted that my SM3 hasn't been updated in quite a while so I'm working off old costs and it includes waste and shrinkage). But I'm not making a plain bar of soap, I want add Lavender FO and Lavender Mica...my costs just went up to $1.48 bar. Of course, I can't just hand my customer a bar of soap...it's needs to be packaged and labeled. My costs just went to $1.76 a bar.
And then there is my labor...this can be difficult to calculate. How long does it take to make a batch of soap (from getting out your ingredients to cleaning up)? How long does it take to unmold, cut, plane, bevel, stamp, box and label? Add to this, I MasterBatch....and I usually do this when I'm making soap 'cuz I'm big on multi-tasking. Add to this, it takes me just as long to make a test batch (4 bars) as it does a small batch (10 bars) as it does a regular batch (18 bars), though there is a time difference once I start processing the unmolded soap. It also takes me less time to make a single color soap is it does to make a 2-color drop/chopstick swirl. Once you figure an average time for your batch size, then how much do you pay yourself? My soap would be cost prohibitive if I paid myself the same wage for soap making that I do for my regular job so I look to what I would pay someone...I just use minimum wage for my state...$12.00. So now the cost of my soap is $2.96 a bar.
Oh...and 'direct/indirect overhead'...can't forget about that. This is
'rent', electric, gas, water/sewer, internet, garbage, telephone, website, business cards, business license, insurance (
property and product), general office supplies, printer ink, merchant/banking fees. Some of these, what I would call 'indirect' expenses (in red) can be calculated the same way the IRS does for 'Business Use of Your Home'. You calculate the percentage of your home used for business and then multiply it by the total of your indirect expense. Add that to your direct expense and then divide by the total number of bars you could reasonably produce if you worked 8 hours a day, 5 days a week.
Or you could just take your base ingredients times two.
