Want to Build Your Own Successful soap Biz?

To Be Successful, Know the True Cost of Your Handmade Soap

How much should I sell my house for? What should a meal cost in a restaurant? My neighbor is selling her car for $10k, so that’s what I’m going to price mine.

Um…what?!

You’d never let a random stranger on the internet price your house. How much a meal costs depends on so many factors! And, of course, what your neighbor prices her car for has nothing to do with what your car is worth.

That’s why I do a facepalm when someone asks in our Facebook group, “What should I charge for my 4-ounce bars of handmade soap?” Or says to me, “Well, most people on Etsy charge about $6 for artisan soap, so that’s what I’m going to charge.” That is not the way the owner of a sustainable business goes about pricing handmade soap!

Know the true cost of your handmade soap

Guess what? It doesn’t matter what other soapmakers think about your pricing. And Etsy is the wild West of soapmakers, many of whom don’t support themselves with their soap business (erhm…hobby). Advice from folks who don’t have the knowledge or experience to help you is just noise. So, it’s up to you to do the work of correctly pricing your soap so that your business is set up for profitability.

What really matters when pricing your soap

Here’s what does matter:

  • How much your soap costs to make
  • If your business can pay you fair wages
  • That you can afford advertising, education, outsourcing, and other overhead
  • Pricing your soap to be profitable for the long haul
  • If your pricing is target market tested and approved

(Want guidance on pricing handmade soap that is super specific to your products, your niche, and your goals? Snag our pricing workbook and make your business dreams a reality…with the profit to match.)

Laying out the cost of your handmade soap…

We often hear business owners say they can’t afford to do xyz to grow their business because they are only making enough to cover restocking supplies. What a dreadful cycle to be trapped in! A little sleuthing reveals that they have only considered the cost of their supplies (if that) when pricing their handmade soap.

You have to know the real cost of your handmade soap before you even think about setting a price. And that means calculating your cost of materials, your labor costs, and your overhead expenses.

Adding up the cost of your soap supplies

Soothing Lavender Soap

Let’s say we make soap in roughly 50-pound blocks. We’ll utilize Brambleberry’s Lots of Lather Quick Mix (for the sake of easy math). And, for this little guide to the true cost of your handmade soap, we’re going to work with our Soothing Lavender Soap product (which is completely and totally a figment of my imagination).

35 pounds of Lots of Lather Quick Mix is now listed at $106.50. Shipping costs an additional $32.08. So our total cost for base oils is $138.58. According to Brambleberry’s website, you need 80.6 ounces of lye and 185 ounces of water to turn that 35 lbs. of Lots of Lather Quick Mix into soap.

If we ordered the lye from Brambleberry, it would cost $30 + $12.73 shipping for six pounds. We only need a little more than five pounds, so lye ends up costing us $35.61.

If we ordered lavender 40/42 essential oil from Brambleberry in five-pound quantities, the current cost is $280.00. However, the shipping is an extra $12.50. Bringing the total cost of five pounds of lavender 40/42 to $292.50. With a usage rate of 3%, we’d need 24 oz. for a 50 lb batch of soap. So our essential oil cost rings in at $87.84.

Onwards, to our distilled water! We need 185 oz. of distilled water. (And there are 128 oz. in a gallon). It’s $1.79 per gallon at a local grocer, bringing our water cost to $2.59.

So, our materials cost for 50 lbs. of Soothing Lavender Soap, scented with Lavender 40/42 with no color added is $264.62. We’ll say 50 lbs. of soap yields us 150 bars of 4.5 oz soap after curing and trimming. That makes our raw materials bar cost $1.76 each.

Don’t eat unexpected costs

Did you notice that I calculated shipping for each ingredient individually? That’s not a mistake on my part. If you run out of lavender essential oil and need to order it alone, I want you to be prepared for that extra shipping cost. It will happen, I promise you. It’s better to be safe than sorry when it comes to figuring your cost of goods sold (COGS).

Takeaway: For pricing purposes, calculate shipping for each ingredient individually.

If you are making special trips to pick up supplies, make sure you factor in your time and mileage. Although shipping costs seem high, for most supplies, having them delivered to your door is the least expensive choice. To keep things simple for this example we will say I grab distilled water on my weekly grocery run.

Don’t forget packaging costs!

For packaging costs, let’s do a custom printed soap box. My most recent order from Your Box Solution totaled out to $0.52 per box after shipping. So we’ll go with that, bringing our total material + packaging cost to $2.28 per bar.

Surprisingly, many soapers stop here (if they even get this far) in the costing process. They will tell you their profit is anything they make beyond reimbursing themselves for their cost of materials. But, that’s just not true!

Now, it’s time to hit labor in the face

Would you support a business that routinely refused to pay its employees? No. Then why would you put up with anything less from your own company? A sustainable business pays its workers a fair wage. Period.

Let’s say it takes an hour to weigh ingredients, melt the oils, and make the soap from start to finish. In addition, we’ll need another hour to cut the soap and package it into boxes. In my opinion, production should never be calculated at less than $20/hour. I would never want a minimum wage worker making my products, and I would never want to pay myself minimum wage. So that makes the labor cost of your handmade soap on a batch $40, right?

Wrong.

Labor costs more than just the amount of money the employee takes home. There are benefits, the cost of doing payroll, and taxes.  Depending on the situation, this can add 10 to 20% to the hourly wage. We’ll go with the middle road and use 15%, bringing our hourly wage cost for production to $23 per hour. Two hours of labor means $46 to produce 150 bars. That makes our labor cost $0.31 per bar.

(Even if you don’t have employees now, you want to make room in your pricing in case you want to hire them later.)

Takeaway:A real business pays its workers. (That includes the owner, Rockstar.)

Let’s add that to our current costs: $2.28 + $0.31 = $2.59 per bar.

But that’s not all, y’all!

And then there is overhead cost of your handmade soap…

You have to spend money to make money. Overhead is the money you spend running your business. A lot of factors go into that number – from rent and utilities to advertising and education. And so much more.

Students tell us all the time that they make soap in their homes, so they don’t have rent or utilities. No, no, no, no! You do have rent and utility expenses. Your biz just isn’t paying for them. Figure out how much of your personal costs are being utilized by your biz. The hold your biz accountable. (And, if your biz needs its own space in the future, the cash for that is already figured into your pricing.)

Also, we see so many soapmakers skimping on the overhead expenses that make the biggest difference in boosting their bottom line, especially marketing and education. That is a false economy. Did you know that you should be spending roughly 20% of your operating expenses on marketing when your biz is in a growth phase? Our students are well aware of that because they invested in education. You have to plan for those expenses if you want to expand your business!

Trade organization dues, product liability insurance, market fees, travel costs, website maintenance, advertising, and donations also all fall under overhead expenses.

What if you are in start-up mode?

Ideally, you will have a solid budget and have your overhead costs down pat. But, especially when you are starting out, that’s a challenge. Even if you don’t have a handle on specifics, don’t neglect to figure in overhead costs when pricing your soap. Start with 15% of your product costs and keep detailed records so that you can make adjustments when you run the numbers for next year.

Takeaway:15% of your product costs is a good estimate for overhead, until you have your costs down pat.

So, that brings the per bar cost of your handmade soap to $2.98 for amazingly luscious best ever Soothing Lavender Soap. Surprised?

A note about COGS

Keep in mind that figuring out your cost of goods sold for pricing is going to look different than your COGS for accounting and tax purposes. Figuring your cost of goods sold for pricing is about estimating, planning, and padding for situations like being on the hook for extra shipping charges. But, figuring your COGS for accounting means recording what you actually spend. (And you are bound by tax laws on whether or not you can account for your own labor, how to figure business use of space in your home, etc. So, enlist a pro, like a CPA, to give you a hand if you need it.)

Bringing costs down

Knowing the Real Cost of Handmade Soap

Once you know the real cost of your handmade soap, you might realize that making soap is costing you way more than you thought! Our example above could certainly have some costs trimmed to make it more economical to produce.

Save cash on supplies

Soapmakers who have done their due diligence have their raw material cost of handmade soap per bar down to $1 or less, especially if they are making 50-pound blocks of soap. If you aren’t there yet, here are some tips.

  • Order in bulk in the largest sizes you can afford, store, and utilize in a reasonable time.
  • Order as much as possible in a single supply order to limit shipping costs.
  • Shop around to find the best price for the best quality. 
  • Have backup suppliers for each ingredient.
  • Only buy supplies for products that you currently manufacture or are in active research and development (R&D).
  • Switch to true wholesale suppliers rather than companies that serve hobbyists.

Reduce your labor costs

Time is money. Get more done in less time.

  • Produce the largest batches that make sense for your business. You only have to expend a bit more effort to make 50 pounds of soap rather than 5 pounds.
  • Don’t waste time on intricate soap designs. That’s thinking like a hobbyist rather than an entrepreneur.
  • Create Standard Operating Procedures (SOPs) so that you aren’t reinventing the wheel every time you step up to the soap pot.
  • Organize your space efficiently so that your production is streamlined and you don’t misplace (and rebuy) supplies.
  • Outsource tasks that can be done better/cheaper/quicker by someone else. (If you currently print your own labels, that’s a great place to start.)

Audit your overhead

Look at all of your overhead expenses during your year-end review and planning session. There is no need to retain that software license or renew that trade organization membership if you are not benefiting from the cash outlay.

Handmade soap pricing basics

With a cost of $2.98 per bar, if we set the retail price for our Soothing Lavendar Soap at $5 per bar, and wholesale keystone at $2.50, we aren’t making money – we are losing money. Even at $6 per bar retail ($3 per bar wholesale), that’s a $0.02 per bar profit.

Um, that’s nuts!

Personally, I figure out my total COGS and multiply that times two to hit an idea of the bare minimum price I want to sell for. My bare minimum price is the furthest discount I ever want to give. It’s less than my wholesale price so I can offer incentives like opening order discounts and temporary price reductions to new wholesale accounts.

Takeaway:Your wholesale price should be higher than your lowest profitable price to allow for sales incentives.

Don’t want to wholesale your soap?

Maybe you aren’t interested in wholesaling. So, you don’t really care if keystone wholesale pricing is profitable. Well, okay, but what happens if you decide you want to get into wholesale later? Or you grow large enough that you decide you want to open a storefront? You won’t be able to afford to take those steps to improve your business, because you didn’t leave any space in your pricing.

In order to wholesale successfully… Scratch that. In order to run a biz successfully, it is essential to know your costs so you can price your products properly. That’s square one. If you are guessing at your expenses, it’s time to pick up the calculator and work out the true cost of your handmade soap. (Or, even better, finally get your inventory and costing software up and running.)

(Looking for more information on wholesaling successfully? Read up on why anyone should wholesale their soap, the bare bones basics of what they need to wholesale, and the words they need to know in building their wholesale program.)

A real life example

To illustrate pricing once you have scaled up to bulk buying from wholesale suppliers a bit better, I picked a 4.5-ounce soap out of my contract manufacturing history. Here’s the math:

  • Raw material cost = $0.73
  • Custom box = $.52
  • Labor = $.31 
  • Overhead = $.23
  • Cost = $1.79 per bar
  • Bar minimum price = $3.58
  • Wholesale price = $4.25
  • Retail price = $8.50

And you know what? That bar actually ended up retailing for $12. Because pricing handmade soap is not just about the cost of your handmade soap. There’s so much more to the equation!

Personally, I’d rather offer a stable price and not have to hit my customers with an unexpected escalation in situations where crops do poorly (olive oil, anyone?), so I subscribe to the APP mantra: always pad pricing. Round the heck up. Tally 20% overhead. Give yourself $30 an hour. Multiply by 3 to reach wholesale. Do whatever you need to do to make sure you have a cushion before you need it.

Soap has killer tight profit margins. It really does. If olive oil jumps in price by 30%, what will your bottom line look like?

What if the market won’t bear what I price my handmade soap?

If you only knew how much of a hot button question that is for  me!

Recently, I surveyed a happy chunk of soap makers. I asked them to divulge their retail pricing per ounce of soap. And I was completely blown away by the results. 21% surveyed said they charge less than $1.25 per ounce. Another 64% said they charge $1.25 to $1.50 an ounce. That’s 85% of the 300 soapers surveyed.

I haven’t charged less than $1.75 per ounce retail in years. And to add a little fuel to the fire: all the soapmakers I know who have employees and count soap as their bread and butter (not a supplemental product)? They charge at least $1.50 per ounce retail for their artisan soap. Why is that? They know their cost of goods sold down to the penny, my friend. And they know that to big part of being a successful entrepreneur is being profitable!

Advice from the trenches

I shared this tidbit of soap pricing advice with a soapmaker (Hi, Melissa!) who was worried about pricing herself out of the market:

Have you investigated if maybe you are in the wrong market, appealing to the wrong customers, selling in the wrong venues, or can up your game elsewhere (branding, packaging, etc.) to create a perceived value? If a bar of soap is loaded with luxury ingredients, it should cost a premium price and be marketed as such. Don’t short change yourself. Your work, expertise, and exceptional product quality DESERVE a fair price.

If your market won’t bear what you price your handmade soap, find a new target market, superstar. It’s out there. Otherwise, this soap wouldn’t exist. Neither would this one. The same goes for hundreds of other soaps on the market! (Plus, when you sell a product with a higher profit margin at lower quantities, you make more money for less work!)

Takeaway:If your customers won’t pay the price you want to charge, get a new customers.

And yanno what? If you aren’t interested making a living by soap slingin’, that’s completely your prerogative. Being an entrepreneur is not for everyone. It’s fine to just enjoy your hobby. But, if you want to make a go at building a soap business, for the love of YOU and the amazingly talented soapmaker you are, pretty please, don’t sell yourself short when pricing your handmade soap.

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98 Responses

  1. HI Kenna.

    Question about raw materials cost. As each bar of soap will contain different essential oils or additives and therefore each bar will have a different raw materials cost, so do you just average the raw materials cost for your range of soaps so that each soap will end up with the same retail price? Thanks

    1. Hi Melissa! You should be figuring out your cost on each variety and then pricing according to what makes you the right profit. I personally chose to line price my products at a comfortable price that all products profited, some more than others. 🙂

      1. I was looking at the prices on Bramble.com. I usually buy lye from an industrial Chemical supply shop. I am able to buy 5 kilos for about 5 USD. NaOH is NaOH regardless of where you will buy it. I am able to find the essential oils for less then 2.00 at the local markets. Usually, for the fats I use any leftover from cooking and will get it from restaurants who are usually willing to give me used oil for free. I will use soybean oil if I need more fat. I can easily sell a 4 oz bar of soap for a 1.00 and make a 50 cent profit. I also make my own perfumes from cut flowers, vanilla and the like. The soap might be made from recycled materials but it still keeps my skin baby soft and i get fewer insect bites.

        1. You have not included any costs for your wages, or insurances, or all the other costs that Kenna pointed out. You are not making $.50 a bar. You didn’t include your time to pick up oils, and while I’m sure that lye kills things, you don’t know what’s been fried in those oils. It might be a vegetable oil to start, but if fish, or some of the oil is from frying bacon, you lose many customers; Jewish, Muslim, vegans, vegetarians…
          You appear happy doing it this way, but I think you are cheating yourself. Are you sure this would pass FDA or GMP practices and regulations? How do you list your ingredients? Because you don’t REALLY know what is in that oil… and, hopefully, no one has an allergic reaction because they are allergic to fish, or some other food that might be lingering. Be careful.

    2. Im not understanding some of the math. Like the example of the 6pounds of lye in total + shipping is 43$. We need a little more that 5pounds. How did. You end up with 35$. Same as with the water example. Thanks great info as well!

      1. J,

        “Onwards, for our distilled water! We need 185 oz of Distilled Water (there are 128 oz in a gallon). It’s $1.79 per gallon at a local grocer, bringing our water cost to $2.59.”

        Water costs per ounce is figured by dividing the cost per gallon by the number of ounces a gallon contains- $1.79/128= $.013984375
        Water cost for recipe is figured by multiplying the cost per ounce by the called for number of ounces -$.013984375×185= $2.587109375

        Each ingredient is handled in the same way.

        1. I normally either use rainwater or I distill my own water using a pot, a plastic bowl, and a metal lid inverted so that the steam will drip into the bowl after it condenses. I usually buy my lye at an Industrial Chemical supply shop which sells it for about 1.00 per kilo and I usually use leftover fats from cooking, get fats and oil from a local fast-food restaurant, and if I need more I simply use up any old oil or fats I have lying around my house. If I really need more I simply buy it from the supermarket. Usually, for perfumes or other additives, I will either make my own perfumes or I will buy them at the local market. The local market near me sells a 20oz vial of jasmine scent for 2.00. My soaps normally cost about 50 cents to make per 4oz bars and I sell them for about 1.00. I am told that my soaps make the users skin baby soft and it whitens their skin. I normally try to market my soaps to Asians as they want to buy skin whitening products.

    3. WOW, thank you so much. This was the exact information that I was looking for..and more. You just upped my game. I will continue to read your articles (and others) to make sure that I am always do what I need to do while starting my business. Have a wonderful day.

  2. Thanks so much for writing such an excellent article. I never added taxes to my labor so now I am adding it in and love the idea of using a % to figure out overhead till you can get a grip on all the number for us new soaper.

  3. Thanks for all this info. I’ve learned a lot. One of the things I struggle with is wholesale. I charge $4.00 for wholesale as my retail is $8.00. Problem is a lot of other soapers in my area retail for $6.00 or $5.00 and can wholesale for $2.50 or $3.00. I end up not getting a lot of accounts for that reason because someone newer comes in at a cheaper price. Retailers seem to care only about the bottom line.

    1. They may not be the right retailers for you! 🙂 I think trying to compete on price is one of the last options we should look at, if you can provide value and market in a way that conveys that value and quality, that should be the ticket! 🙂

    2. There is another way of looking at it. The soap makers that wholesale their products so low usually don’t stick around for more than a couple of years. If a store won’t carry your products because your wholesale is $4 per bar, then that is not a store you want to deal with. Good stores that WANT high quality will pay you right. My wholesale is the same at $4 each bar. The stores that I target are coops and high quality stores and I never had someone tell me it was too expensive. Also, stores don’t like it when a soap maker disappears. When you price it right, you will stay in business and soon enough, your brand will get more popular and if store owners have seen (and maybe even bought!) your soaps before will be more confident in buying from you.

  4. I’ve always figured my costs the way you laid out but I have difficulty deciding what percentage of overhead to apply to each bar of soap so I don’t end up narrowing my profit margin.

    1. Common overhead percentages range from 5 to 20%. For handmade products with tight margins, I think 5% is terribly unrealistic. I advise my clients to use an overhead percentage based on their plans and goals for the future. For example, a retail store has more overhead than a straight manufacturing space. If a company plans on securing a distributor or sales reps, those hit the bottom line hard (10 to 20% of the sales). If you aren’t sure where you are going, use 15% – it’s a nice middle of the road number. Re-evaluate it after a year in business and being able to actually look at your overhead expenses.

      1. I’ve been crunching numbers til my head hurts for awhile now, and playing with different percentages while my business grows (selling mostly to friends/family so far…so they’re game to playing guinea pigs. lol) but when I go out to sell to more stores than I have, I’m sooo glad to see that your recommendation of 15% matches the number I finally landed on for my mark-up. I tried 12% to keep a small store owner happy, but I’m not happy trying to keep HER happy so she can sell my product at just a little over cost. Thank you for this article, and the information. It gives me the edge I’m going to need to get a bit more bold, and grow with my business! 🙂

        (website is down for now due to my fickleness in shopping for the right host site).

        1. “but I’m not happy trying to keep HER happy so she can sell my product at just a little over cost. ”
          THAT shop owner is going out of business! She does not know her costs. Having a minimal markup will kill you whether retail or wholesale. And when you shop owner goes out, she will likely OWE you money. Is that figured into your costs?

  5. Since we’re just starting out, we’ve ballparked a lot of these costs, but never really thought about factoring in rent, utilities & such (since we’re still in our garage, lol). Factoring in materials, packaging & labor we were at roughly $3.90 per bar before, but our bars are big – 10 ounces minimum. We’re retailing them for $13 right now, and plan on wholesaling for $750 or $8. I’ll be curious (but dread reworking all those numbers!) to see what we come up with when we take a sharper pencil to everything.

    Thanks for this post. It will really help us focus. Its satisfying at the end of the day, knowing that you’re actually making money!

    1. Completely agree! Love your niche of big fat bars for burly soap users! 😉

      Nothing is better than knowing you are profiting when you sell a product, and it’s great to hear a fresh soap company taking themselves seriously!

      1. My nephew is just starting his soap/jewelry business. He’s 10. I run my own jewelry business and guide him.
        I charge for his labor $5/hr because at the venues that allow a 10 year old his own booth, well they won’t bare $5 a bar for soap. Our cost with packaging, supplies, and labour are $1.30 a bar. We charge $3 a bar or 2 for $5.

        What can we do better?

        1. Short answer, YES! You can do better, Virginia.

          Kenna’s kiddos are 5, 8, and 9 now and they did Brand Magic (our ebook for branding guidance) as part of their business planning. No passes for cute kids, no matter how adorable. 😉 I think the best thing you can do for your nephew and his budding biz is to take it seriously.

          Honestly, I wouldn’t encourage any handmade soap biz to sell at a market that can’t bear $5/bar. In Pricing for Profit (our ebook for pricing guidance) we talk about why pricing any handmade soap under $1.75 USD/ounce retail is a red flag for unsustainable business.

          We talk more about raising prices and still delighting customers in another article. It’s definitely worth a read. But, it sounds like you (and probably your nephew) know that he needs to find better sales channels.

          Perhaps he can write to the board of the markets he wants into and ask if he can rent a table if he has a mentor present? Or maybe the two of you could split a booth? Is a website is an option since they are more straightforward to build these days?

          I love when entrepreneurs help raise up the next generation of business owners! Kuddos to you for that. But I also want your nephew to know his time and talents have worth. <3

          1. Anne,
            There is a worksheet for determining costs in Pricing for Profit. If you are in business, I highly recommend inventory/costing software to assist you with all of those calculations, although some people do stick with spreadsheets.

            Kenna uses Soapmaker 3 and I use Craftybase. Either will help you lock down the real cost of making your soap.

  6. Very well done analysis of cost. I followed the link to a $45 bar of soap. Don’t you wonder how many bars somebody sells at $45. Not many I would think.

    1. With the right branding and right niche market, anything can sell well. I personally know many soapmakers who sell their soap for anywhere from $6 a bar to $30 a bar, and all of them do well with the right marketing & branding. 😉 There’s a market for everything under the sun! Besides, even if you sell less, the profit per sale is larger – basic business! 🙂

      1. I’ve been lucky. I was able to get into some high end retail stores at $6 per 4 oz bar 20+ years ago. My problem has been since moving, taking time off, and accounting for not only inflation but the level of packaging and web site design people now expect, I feel a bit leery about moving back into this new market. The investment up front in equipment and basic supplies seems quite large. What would you consider a necessary amount of capital to (re)start a business now?

        1. Hey, Babs,
          It is really a matter of setting goals and budgets – things like business licensing, workspaces, branding help vary so much in cost. So it is not a one size fits all answer.

          If you are leaning toward reopening and need help to get on a legal, sustainable track, you might want to look at our Soapmaker to Moneymaker class.

  7. Hi Kenna, I learned so much from this article. I did a festival yesterday and someone asked me to send them my wholesale package. So of course you know I ran right over to this site.

    I never crunched the numbers before, but I am totally blown away. I need to do a better job of pricing my soaps in the very very near future.

    Thanks for the kick in the pants!

  8. Oh wow!! What an insightful article. I now realize that the error I made…in ignorance :(… was to START out with a super low retail price point knowing full well that I have a super luxurious bar of soap. 9 oils & butters of luxury to be exact. 🙁 And although my heart was to provide an excellent luxurious bar of soap at an affordable price…for even lower income families…I fear changing my price point now will be next to impossible to remedy. Any suggestions or counsel for me?

  9. Thankyou for the excellent article. My wife and I are new soapers and are putting together our business plan because we want to have a mail order soap business as well as doing shows and festivals. We have used natural soap for 20 yrs. my question has to do when trying to include the cost of doing a show or festivals? Is it best just to use the previous year figures if you are planning the same number of events?

  10. I love this article. I celebrated 11 years yesterday 2/19/15 and All those years of selling I NEVER did the COGS until about 2 months ago in preparation for the 2015 relaunch of my business under a new look, name, packaging etc…, I sold MYSELF SHORT for 10 years. I couldn’t believe it when I learned to calculate my costs. I was mad and ashamed of myself. You can’t see a fragranced bar of soap for the same price you sell an unscented soap, and to add to that a bar of essential oil soap. I know better now and things are going to be different for sure. My customers have even been told that I will DO MYSELF right so to expect an increase in prices. No more selling soaps for $6 a bar for all bars. That was and IS unrealistic. My financial survival and success depends on my ability to get this right. Thank for your this Kick in the pants article.

  11. Hey! My wife and I are new to soap making but we specialize in creating all-natural, vegan, organic soaps. We don’t use dioxides, micas, or pigments for coloring and we do not use fragrance oils but only pure essential oils for scents. We have an interview with a store here in town that wants to sell our product. We have just done this as a hobby but now are thinking about getting more serious about it. Our packaging is pretty dope (If I say so myself :)) so now the question that we are stuck on is how much money to charge for wholesale? We have figured it out and our bars base at $1.13 a bar. Then depending on which essential oil we use it could go up to 0.75 more. We are thinking of charging $4 a bar wholesale. That would give us enough money to replace what we put into the bar to make it, pay to make another bar, and then give us a little extra for our time as well. Do you think this is a good wholesale price?

  12. LOVE it. Ive been expounding on this topic for years and it the main part of my talk upcoming at the Canadian soapers conference. Well done you!

  13. Wow, I love this Kenna. My mom and I started a soap business in late 2014 and it didn’t do so well, but we’re regrouping right now, and everything is going a million times better. Part of the problem was we weren’t marketing our soap correctly, and we were selling ourselves short on the price. This article has really put into perspective how priceless handmade soap is. I can’t wait to check out the rest of your site for more tips, especially wholesaling.

  14. Thanks for writing this great article. I have been wholesaling my soap for $3 each and they are retailing for $6 each. I really feel like we need to raise our wholesale price to $7 but we’ve be selling in our shops for 6 months or so now. Is it too drastic to change the price for consumers overnight from $6 to $7? Should I do it incrementally or just jump from $6 to $7?

    Thanks

  15. I am reading through your site, and I read “And yanoo what”. What kind of a word if “yanoo”? It certainly is NOT an English word, and it is terrible use of slang on your website. You are, in effect, bastardizing the English language, and it is disgusting to me to see people doing this, as opposed to using proper English. Are you just too lazy to type…”And you know what?” I won’t visit your site again, if only because of this terrible use of what you call words. VERY unprofessional for a website of this caliber.

    1. I’m commenting in defense of the author. She doesn’t know me, as I’ve read her articles for some time without commenting.
      However, your unfounded tirade on her usage of “slang” brings me out of the woodwork. She’s provided some beautiful and much needed information on her art and is using her experience and expertise to help others.
      Out of all of that, you choose to rant about a minor colloquialism? A time honored tradition in many types of writing and literature? Writing classes encourage adding interest through dialect and idioms. Are they, too, “bastardizing” the English language? How pompous of you, Bob.

      Kenna- please continue the amazing things you do- complete with the well written, funny, and interesting style you do it with! It keeps up reading with anticipation, not boredom.

      1. Mr. Bob, If people weren’t so judgmental…..we wouldn’t have wars.
        What makes YOU better than another just because you “write” better???

      2. Thanks, Tanya, I appreciate your comment. 🙂 I will always put out content that is both interesting and fun to read – that’s why I’m here.

        1. And thats why you’ll stay. Your articles are stuffed full of information, experience and your great sense of humor shines through! Keep up the great work! We love it! Yanno what I mean?!

      3. I agree. Move on Bob. This isn’t an Eglish class. She’s provided us with some very useful information. That’s a huge problem .in our world. Everyone wants to judge. I only have 1.

    2. Hi Bob,

      I appreciate your feedback. As an English literature geek, I take an immense amount of interest in the usage of the English language in writing. While I am perfectly capable of writing for the academically minded, Modern Soapmaking would not be as approachable if stiff language ran the gamut. I intentionally utilize a tone of voice and style of writing that is more interesting to read and encourages conversation among the community, and that’s not going to jive with everyone. I hope you find an extensive soapmaking resource that is more on point with what you expect.

      Kenna

      p.s. For those who are coming across this comment in the future (this is one of the more popular posts on Modern Soapmaking), I entirely appreciate the support of the community. Pretty please remember to rise above negativity and keep discussion positive. Each member of the Modern Soapmaking community is entitled to their opinion, whether we like it or not. 🙂

      1. I am totally appalled at what “Bob” said. I love reading about soap (as a newbie), Keep goin’ girl! So sorry if this offeds but in the deep south we don’r enunciate every word!!

    3. I appreciate the liberties she takes with the English language. I’ll bet you’re real fun at parties!!

  16. I second what Tanya said Kenna, if the use of one word is what threw Bob into a fit, you don’t need him on your site. I am a new soaper and just started experimenting with colors. I am stressing out over packaging with different shapes and sizes of soaps. I don’d know whether to shrink wrap it or box it. I was stressing out over pricing my soap as well. This is my first visit to your site and it is very very informative. Thank you. I will no longer be afraid of pricing my soap at a decent price. Before I was stressing over $5 or $6 dollar bars. Now, I will price them fairly for myself because I put lots of goodies in my soap to nourish the skin so I might as well get paid for it. Do you think it is a good idea to get a soap application to help with cost. Right now I am producing small batches with smaller molds. My largest mold is 5 pounds eek! Looks like I better grow if I’m going to stock up on inventory.

    1. For packaging ideas, check for a design school in your area – sometimes students will take on a real-life product for their design assignments, which will be judged and (positively) criticized by experienced teachers. You’d be amazed what wonderful creations come out, and it can be very cheap or even free!

      1. That’s true, you could do that. On the other hand, graphic design students are just like soap makers- we deserve to be paid, and, like a soaper, you aren’t going to get a luxury item for free. In essence, if you paid nothing, that’s probably what you’re getting.

  17. Great article. Thank you! I have read different ideas about calculating overhead into COGS: yes / no to utilities, rents? Yes / no for time / mileage for getting to farmers markets, to supply whole accounts? yes/no for time and mileage for driving to local vendors?

  18. Thank you so much for this important information – will bookmark this page for the future when I decide to go bigger with my jewelry hobby 🙂

  19. Kenna, you wrote the following in this article. Is this typical and realistic? It seems like a lot more waste been in real life. We haven’t made a batch yet and want to plan correctly.

    …. “We’ll say 50 lbs of soap yields us 150 bars of 4.5 oz soap after curing and trimming.”

    1. Yes, that’s about right. Soap tends to lose about 8 to 15% of weight during cure, and you’ll lose a small amount of the soap in the manufacturing process, between the amount of soap left in buckets and on the mixing tool/spatula, etc. A 40 lb. block of soap at that cut size and labeled bar weight of 4.5 oz (most of the soaps will weigh more like 4.7 oz, but labeling should always be the minimum weight while in commerce) yields 120 bars depending on the mold orientation and cutting pattern.

      1. Hi! I’m new to soaping but i have been making soap for my family for two years now. We ready to start a business with it I’m not good at numbers at all. I was charging $5 a bar because I through it was a great idea at the time. I just went to $3.50 a bar because I’m being rush into making soap for people and I really don’t no whst my price points will be for selling if I open a store next year. Great read!

        1. Hi, Pamela,
          It sounds like you are feeling pressured to get into business rather than enjoy your hobby. I’d urge you to take a step back and read this article to make sure you are properly prepared and protected if you go forward in business: What You Need to Know Before Starting a Soap Biz

          While I don’t know your bar size, your pricing sounds very low. We usually consider anything under $1.75 (USD) per ounce a red flag that you are likely not sustainably pricing. If you need a bit of help with the numbers, we have a workbook for that: Pricing for Profit

          All that math gets a lot easier with inventory software, so you know your real cost going into each bar (makes tax time easier too). Kenna loves the Soapmaker software, and I personally use Craftybase (Software Recommendations)

          I urge you to make sure you get all of this on lock before opening a store. If you aren’t good with numbers, you will need to outsource, so plan for that in your budget.

          Hope that helps!

  20. I love your articles. As a new soap business I have been struggling to price my soaps as well as find the right market. I will stayed tuned for more of your excellent suggestions and expertise.

  21. Hello Kenna, Thank you for your very informative posts, I have been making soaps and body products for at least the past two years and has been giving them as gifts. Lately a few of those folks I have given as gifts suggested I start selling them I do use luxury ingredients such as mango and avocado butters, neem, jojoba argan oils etc. My pricing is what I am very nervous about. What is the right or best way to go about doing this…Please help. Thank yo.

  22. This was such a helpful article!! I’m not a soap-maker but it helped hold me accountable to my own craft business. Yes, some of my return are things that aren’t monetized but at the end of the day, I want it to be a business, not a hobby.

  23. Congratulations! This is a well written article…slang and all. ;-).

    You’ve covered the cost accounting principles of indirect and direct costs which helps to accurately price products.

    My only contribution would be for your readers to track the costs in a spreadsheet for each batch of soap. That way they can begin to see trends in their COGS over time. They might discover that certain materials are cheaper at certain times of the year and purchase more of it when the price is the cheapest.

  24. I am fine tuning my pricing, this is helpful.
    However, shouldn’t equipment costs be factored in?
    I just recently upgraded equipment (larger stick blender, cutter, displays) and will soon be building/purchasing larger (25-40lb) molds.
    What % should be allocated for equipment?
    Thank you!

  25. THANK YOU, THANK YOU, THANK YOU. At first I started this business wanting to give others the opportunity to experience natural products but when I transitioned my line to vegan products I was trying to give the same prices and never could understand why I wasn’t making money. I am revamping everything for 2017. Increasing prices and working on new packaging. It’s time to make this a real business. Everyone loves my products it’s time to reflect all the yumminess I put in my products with my packaging and prices.

    AGAIN THANK YOU!!!!

  26. We struggled with determining our actual retail price for our online website and shows. However, when I began looking at other soap brands I realized that maybe some people were just way to low in price. There are always markets for products it is just that some are smaller then others and yet they can still be very profitable.

  27. I was offered $3.50 whole sale for my soaps by a large store who was going to retail them for $7.00. I didn’t think that I was getting enough in percentage to make it worth while. They are 4 oz. Bars

  28. Thanks soo much for your website. I have not made my first bar of soap as yet, but it’ll be this upcoming week. I’ve read multiple articles & went to buy more supplies every several articles (ha). I now have focus & a plan. I will be starting with a basic 3-oil recipe, and cold process. I do have a question: infusion. Is that done with one of the oils in a recipe or all the oils of the recipe? Is it correct for me to understand that I am to make enough infused oil to last across multiple recipes? I hope to add more about what I am doing soon. Best wishes to everyone else.

    1. Hi Warren 🙂 You can use an infusion in a single oil in your recipe and make enough infused oil for multiple batches, or you can infuse all of the oils for a single batch of soap. It’s completely up to you! The first method (infusing a single oil and incorporating it in multiple recipes) is the most common. Hope that helps.

  29. Great article Kenna! I’m having a dilemma with shipping. Where do I go if I want to offer free shipping, or economy shipping? All of the flat rate pricing seems to be around 6 to 7 dollars a unit. If i want to charge $3.99 for my product how do I ship it for free without losing money?

    Maybe it’s not possible, but this seems like a potent group of soap makers and business owners. I’d appreciate any info.

    A fellow Soap Enthusiast.

    1. Well, Christoper,
      To not lose money, you have to make sure your costs are covered. And if you are selling an item for $3.99 (which sounds super low if you are talking about a full-sized bar of handmade soap) there is really no room in your margins for offering free shipping.

      I’d suggest you read up on best practices for shipping and common methods for handling the costs.

      If you want to revisit your unit pricing, beyond the info in this article, our Pricing for Profit workbook is a great resource for sussing out your costs and making sure they are covered.

      So, I’d suggest you either (1) find a way to add value aside from free shipping (2) increase retail price to cover shipping (3) offer free shipping only after a certain $ level has been reached on the order. Or a combo of those three suggestions. Use the resources listed to make a smart, sustainable plan, Christopher.

      Good luck!

  30. I must be doing something horribly wrong. I use the price of the product (oils etc) including freight, work out the price per gram and then multiply that by what I am using. None of my little batches (weight 1.3kg before curing) come out at a cost less than $50 packaging not included. I live in Australia, I would love some advice

    1. Hey there, noppiev,
      It’s hard to say what is going on in your particular case. One thing that stands out is that a 1.3 kg batch is tiny from a production standpoint. I’d guess you are getting about 10 bars from that? It takes a lot of prep, making, and clean up time to make a batch, but it doesn’t take that much more to make a much a much larger batch.

      Are you buying your supplies in bulk from a reputable supplier or are you picking up a pound or two locally? Buying bulk brings your per bar cost down and gives you the option to masterbatch, which can save you a lot of time and money.

      I’d also recommend https://www.modernsoapmaking.com/product/pricing-handmade-soap/. The book will really help you sort out what is boosting your price so much and where you might be able to make adjustments.

  31. Hey there!

    My wife and I want to start up our own thing! We have already gotten started by selling to family and friends and local people and it seems to have taken off. We want to get more into it and any newsletters, forums, advice, templates or services would be great. At the moment we are not in a position where we want to subscribe to anything and get stuck with a monthly fee right out of the gate. Do you have anything like that free of charge?

  32. Super interesting! I think I am going to print all your articles and stick them to the walls as a reminder (LOL)I charge my soaps $2.5/oz in retail (organic oils). However, I try to buy larger quantities of raw material (for the reasons you mentioned aka &^%^ shipping costs/ better prices…), I have to check my cash flow, so I can’t buy bigger. However, I sell my 5oz soaps for $12 with organics oils…I feel I am not branding my products correctly. As much as I have loyal, returning customers, I have trouble reaching new ones, specially online, That’s why I am desperately trying to get into wholesale because I am not selling fast enough…. I will try to practice your advices about marketing, because wholesale is nice if you can get in, but online (full price is nice too)!!

  33. If you hand carve designs into your soap bars and it takes up to about 1 hr and a half to carve the design would a price around $2.99 be a good choice? Especially if soaps are themed? I figure that non specialty bars would range from $1.99 but I wasn’t sure on the ones I design on would cost. Would $1 more be a good price?

    Also, where do you recommend would be the best place to find authentic organic based extracts for scents? I will be doing extracting eventually but for now I want to get scents already made.

    1. Elizabeth,

      Did you read the article? Because I’m a bit perplexed at your question…

      You seem to be suggesting selling a basic bar of handmade soap for $1.99. I can’t imagine that that would cover most people’s costs, much less leave room for profit. Our red flag for unsustainable handmade soap pricing is anything under $1.75 per *OUNCE*.

      But, for the moment, let’s say that $1.99 is your base price. Then, you add 1.5 hours of specialized labor to carve that bar. If we calculate that labor at $20/hr and add 15% for related expenses, you are looking at an additional $34.5 in labor costs.

      If you only added an extra $1 to the price for carving…well, let’s just say *I* wouldn’t work for anyone for well under a buck an hour.

      I suggest you reread this article. And read up on why specialized soap designs don’t always pay off for businesses. I also encourage you to read up a bit on why you should raise your prices.

      As for scents, here is an article on our fav essential oil suppliers. You will have to check individually to confirm organic offerings.

  34. Hi Everyone

    Today is the first day of my new venture. I am going to start this as a hobby and see where it will take me. I have had enough of these chemically induced products that we are inundated with at supermarkets etc and decided it was time to take matters into my own hands. I am on a new quest to change all my beauty and skin care products to natural remedies only.

    Thank you to everyone who post such wonderful comments and ideas.

  35. We’re snowed in today and mt kids are home from school. We decided to make some soap. I bought some virgin olive oil and coconut oil at target around 54 ounces of each. I bought 4 and it came to $47.00. They had a 3 pack of essential oil Lavender, eucalyptus, and peppermint oil for $18.00. They didn’t have sodium hydroxide but ace hardware did. $6 dollars for 2 bottles which was exactly the amount i needed. I also bought a $4 dollar container to pour the final mix in. When it was all done i weighed it. OMG i have 20 pounds of soap now. That’s like 79 bars. I don’t sell them this is just a fun project. So it costs me about 70 dollars to make 79 bars of soap just going to Target. Walmart would probably be cheaper but Target is right down the street.

    1. Hey, Richie,
      You can definitely bring that cost down by ordering from soap suppliers, if y’all want to repeat the project in the future. And no need to spring for the pricey olive oil if you do purchase locally. A light olive oil will work just fine (with less scent). But I’m glad your crew got a fun project in and has a nice stash of soap to use up!

  36. Pingback: Best 75 Businesses To Start With 10k in 2020 - Ippei Blog
  37. Hi! I’ve recently started making soap because it’s fun and pretty (my sister is starting up a soap business and got me interested), and I thought I’d sell some of the soap since there’s no way I can use or gift it as fast as I make it, so I had to come up with prices. So glad this came up when I googled “soap price”! I’d forgotten several things when calculating my base costs. (shipping, for one thing… adds at least 10 cents per oz to the soap base I’m currently using. And packaging!)
    I’ll have to do more calculations, but at least now I can know that no, I certainly DON’T need to lower my initial quotes.
    I’d done a rough tally of soap base and time (@$20/hr) spent on my most recent batch, ignoring scent and color for the moment due to the small amounts used per batch (and not wanting to calculate what percentage two drops out of an ounce of colorant was) and got somewhere around $1.50 per oz cost. Felt guilty about selling them for $3/oz (though less guilty than when I’d forgotten to account for my time and for the shipping [thought my base was only costing me 17¢/oz instead of about 25¢/oz]) but after reading this, I don’t anymore.
    I was even thinking that since I was making small soaps (over half of my molds, not that I have that many yet, are under an ounce), I should charge less for them, but as you pointed out, doing detailed work means that it takes more time/effort per oz, so that needs to be factored in as well!
    I may even raise the price further! I’ve made two sales so far, and the second person commented that the price I quoted her (a dollar for a 1/3 oz molded rose) was rather lower than she’d expected.

    1. Hann, when in doubt, raise your prices! If you want to take a deeper dive into pricing, we have an ebook you will enjoy: Pricing for Profit. (And, we have a ton of other resources for getting started in a soap biz, so just reach out next time you have a need so we can point you in the right direction!)

      1. Thanks! I appreciate it. I’m going to poke around your website a while longer for now.

        I’ll probably raise my prices further. The first time I read through this, I wasn’t sure what wholesale and retail meant, but I’ve done some external research since, and that clarified some things for this read through.
        Might have different pricing sets for different kinds of soap. Currently, I’m working with Melt and Pour soap base, partly because I wanted to see what that would be like and partly because I knew it wouldn’t require as much equipment as cold process, and I didn’t want to wait until I could get everything (like a stick blender, and a scale, and a dedicated pot, et. cetera) to start making soap. I imagine that the two kinds of soap will have different COGS, and also I might do different things with the different kinds. For example, I might use the molds mostly for M&P, and do mostly bars with pretty color patterns with CP. Or maybe I’ll do both with both; I’ll have to experiment and find out.

        There was one thing in the article that was a bit confusing. The example given said 35 pounds of the Quick Mix, and then later said 50 pounds of soap. I assume after the water and lye is added, the raw materials are 50 pounds, but it’s never outright said how much Quick Mix you need to make 50 pounds of soap.

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