Whether you’re making your own soaps and buying the raw ingredients or reselling wholesale soaps, you’ll want to know how to have accurate product pricing for your soap business. Are you considering your labor and overhead? Small costs are everywhere, even paper towels, so you need to be sure to account for everything.
In this guide, you’ll learn why if you don’t understand your product expenses and price your soaps accordingly, you’ll become very frustrated. You’ll learn how to determine your distribution model, which describes how you plan on selling your product. Then you’ll learn how to calculate the cost of goods, which is either the raw ingredients, materials, and labor, or the cost of pre-made soaps.
The final step requires a bit more math, but it explains how to determine your pricing strategy. Essentially you add the product cost of goods to the profit you are expecting to make and that’s how you get the price!