Soap Price – finding the right price
In order to wholesale handmade soap bars, you will first want to figure out what it cost you to make a bar of soap.
A few years ago I took the time to figure out how much each one of my ingredients cost were per gram and ounce. This was a tedious project, but it gave me a real clear idea of how much it cost to make my soap.
This helped to determine how much I needed to charge my customers, although with soap you can only charge what the market determines. In our area soap sells for between $5.00 to $7.00 a bar. It’s important to see what soap is selling for in your area and remember you can always raise your prices, but dropping them doesn’t always look good.
I was at a big craft event this last weekend, I’ve done this one for 15 years and it’s one of my best. I try to keep my soap prices as low as I can so people can benefit from the qualities of handmade soap without going broke. My bars sell for $5.75 – $6.75 depending on what it is. There was a new soap vendor at this event selling her soap for $8.00 a bar. The bars were smaller than mine and at the end of the event, she was packing most of it up and taking it home with her. So be careful not to out price yourself.
Calculating the Cost of Goods
Using Recipe #1 here is a calculation of what a bar of soap costs to make
- 1800 Grams Olive Oil x .007 = $12.60
- 450 Grams Coconut Oil x .006 = $2.70
- 300 Grams Palm Kernal Oil x .006 = $1.80
- 250 Grams Palm Oil x .006 = $1.50
- 250 Grams Grapeseed Oil x .02 = $5.00
- 420 Grams Lye (Sodium Hydroxide) x .009 = $3.78
- 4.5 Cups Water $2.50
Total Cost to make before scent or color for 30 bars is $29.88 or $1.00 a bar.
Now depending on how much scent you would like to use and the cost that bar will go up. In a bar of Lavender soap I would add between 2 – 3 ounces of lavender essential oils. So the cost of approximately 3 ounces of Lavender Essential oil would be $23.00 if you are using mica’s for color adding a dollar should be sufficient. $53.88 per batch.
So using these figures a 30 bar batch of lavender soap would cost about $1.80 a bar. This price does not include the time it took to make the soap or the overhead cost of rent, electricity, wages etc., because I make my soap at home and I don’t’ want to out price myself so I add a flat rate of $30.00 a batch. Rounding off would round this off to $85.00 per batch making my cost approximately $2.83 a bar. Now I double that price and my bar should sell for $5.66 so $5.75.
Tips on how to keep your costs down
Order your supplies once or twice a year by doing this you save on:
- shipping costs – only paying on two orders
- ordering bulk – often the more you order the cheaper the item
- order when sales are one. Soap suppliers often have semi-yearly sales
Order your Olive oil from a wholesale food distributor by the pallet is far cheaper than ordering 3kg tins from the soap supply store.
Check your pricing and shop around.
Selling Consignment Shops
In the early years of making soap I was often approached by people wanting to sell my soap in their shops on consignment.
I have over the years sold in all kinds of shops, hairdressers, furniture stores, gift shops, heritage sites, coffee shops, beer breweries, art studio’s and galleries. At the present time I only have one consignment shop left and soon will eliminate that one as well. The reasons being:
Some shops that have your soap on consignment are in no hurry to sell it. It looks nice and fills a shelf for them, they don’t lose anything by having it there. They just take the 30 or 40 percent when bar sells.
In all the years I have had a few shops that were really good, but I’ve had some real bad ones.
The one I have left now, they will e-mail and say they need more soap, when I ask what scents I will get an e-mail back saying “oh I don’t know, why don’t you look when you are in town” Now in town is a 60-minute drive for me and when you are taking 40% commission I’m thinking you can do a count…… Well I took the drive in and was shocked to see the soap had been moved to a corner and all the soap was sticky because of the two windows on each side of the corner leaving them in direct sunlight for lord knows how long. Sitting in direct sunlight for a month or so and sweating like crazy and no one noticed this? (My invoice has in bold printed on the top “To preserve the color and quality of the soaps keep out of heat and direct sun. Thank you!”
So a very big FYI when they don’t own the soap, they really don’t worry about it too much. They don’t keep track of what sells or what doesn’t sell. I even supply the shelf for the soap to sit on and in some cases when stopping by to check on things have found other items on the shelf and the soap sitting in the back.
Two Consignment stores I had been absolutely awesome doing inventory, tracking what sold, making sure everything was displayed nicely, unfortunately they both sold the business’s.
So be very careful if you plan on doing consignment that you know and have checked out the establishment well before putting your soap in with them, make sure they know how to care for it and are going to look after it.
Wholesale Handmade Soap Bars
Do you have a minimum order for wholesale?
I have never really set a minimum order for wholesale as generally the orders are always more than 36 bars. This would be up to you. I know some soap makers will put a minimum of $100 or 50 bars, but it’s up to you what you feel is best.
My wholesale orders are not done on a website, most just through e-mail so I am often paid by e-mail transfer, PayPal or cheque, so once again it is what would work best for you and your business. If you are selling wholesale mostly on-line you may want to accept Visa or MasterCard as well.
Accepting terms net 10 or net 30 is up to you as well. I generally get paid within a few days of the product being delivered if not that day.
Do you have a return policy?
This is important! Make your return policy before you wholesale. It should contain things like:
- Your responsibilities – timely delivery of order
- How to deal with damaged product
- Customers responsibilities – keeping soap out of direct sunlight etc
- Payment terms
A wholesale Catalog
A wholesale catalog can be very helpful. I have one done up in an excel spreadsheet, when I ship my orders I’m sure to put one in the order. If there are any new products I put a note in and often the customer uses that sheet when re-ordering.
When determining a wholesale price it’s good to have a look at what other soaps are selling for and more than likely the wholesale price is going to be half. If you charge $4.00 a bar wholesale and the customer can get it from someone else for $2.50 chances are they will buy it elsewhere.
You obviously want to make money selling soap. If we take the example about where the Lavender soap costs is about $2.80 a bar then if it were to sell wholesale for $3.90 you are only making $1.10 a bar. The key is to get costs down, the price of the Lavender Essential Oil could probably be reduced if it is ordered in bulk. I did a quick check on one of my suppliers (a little expensive with essential oils) A 17 ounce bottle of Lavender Essential Oil would sell for $78.00 so 3 ounces would be $13.86 rather than $23.00 – this would bring the price of a bar down to $2.50.
Another supplier offers Lavender Essential oil in 35 ounce bottles for $98.08. Buying this would bring the price for 3 ounces down to $8.40 – which would reduce the cost to $2.35 a bar. So you see, by buying bulk and shopping around you can really reduce your cost.
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