# Cost of production



## DWinMadison (Jan 15, 2013)

Have any of you never calculated the average cost for production of your soap? I get about $0.93 per ounce before labor. Does that make sense?


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## gratia (Jan 15, 2013)

I think that is what we all do.  Well those who sell at least.  I think if I remember off the top of my head, I am a bit over a dollar.  Can't remember exactly without lookin at my notes.


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## Gryfonmoon (Jan 15, 2013)

I made a spreadsheet that calculates that for me, after using my other spreadsheets that calculate lye cost and oil cost per ounce.


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## Maythorn (Jan 15, 2013)

A lot if you took into consideration the time, the supplies, the preparation, the labor, all the water. :razz: It would be an expensive bar of soap and so when I see high-priced soaps I think, oh I think I know why.  Really though if you sit down and add everything up and how hard you worked I hope you never shortchange yourself and that your soaps sell.


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## DWinMadison (Jan 15, 2013)

Maythorn said:


> A lot if you took into consideration the time, the supplies, the preparation, the labor, all the water. :razz: It would be an expensive bar of soap and so when I see high-priced soaps I think, oh I think I know why.  Really though if you sit down and add everything up and how hard you worked I hope you never shortchange yourself and that your soaps sell.



Actually, I'm asking because my mom asked me to make soaps to give as gifts to Thai teachers on an upcoming missions trip.  The church wants to at least cover my costs.  Of course I'm not going to charge my mom's church for labor, but I'd love to help. Started calculating on a spreadsheet and came up with the following: 

Fragrance Cost per Oz	 $0.16 
Lye Cost per Oz	 $0.47 
Oil Cost Per Oz (Calculated)	 $0.24 
Color Cost per Oz	 $0.06 
Total Cost Per Oz	 $0.93 


That's actual costs of the oils as I plan to mix them.  
Actual cost of lye purchased from Lowes @ $15 for 2lbs
For fragrance, I hit the middle of the road assuming $10 for a 4 oz vial of generic fragrance like tea tree oil and 1 Tbsp per lb of soap.

It does not include my time, any packaging or shipping costs to my mom in the next state.  I was surprised at how expensive it really is.


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## kdaniels8811 (Jan 15, 2013)

Wow, you guys have expensive ingredients.  I track my cost and even with expensive essential oils, I am at about $1.10 per bar which weighs about 4 ounces.


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## Maythorn (Jan 15, 2013)

That looks pretty thorough.  Can I ask about your fragrance cost per oz?  Is that because you buy in pounds not an oz at a time to try like I usually do?


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## green soap (Jan 15, 2013)

DWinMadison said:


> Fragrance Cost per Oz	 $0.16
> ,,,,,,  I was surprised at how expensive it really is.



$0.16  x 16 oz in a lb = $2.57 a lb for fragrance oil.  I want to know your supplier  :razz:

I think you slipped a decimal point and you meant $ 1.6 an oz?


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## DWinMadison (Jan 15, 2013)

green soap said:


> $0.16  x 16 oz in a lb = $2.57 a lb for fragrance oil.  I want to know your supplier  :razz:
> 
> I think you slipped a decimal point and you meant $ 1.6 an oz?



Actually, the number was indeed supposed to be $0.16 *per ounce* of soap, but now that I check it, I believe it's actually $0.07 based on these assumptions:  $10 for a 4 ounce bottle (that's an estimate based on the lavender and tea tree oil I just bought, but I know that EO cost varies greatly based on the oil, source, quantity, etc).  Anyway, 4 oz =  8 Tbsp, so $10/8 = $1.25 per lb assuming 1 Tbsp per lb of soap.  This divided by 16 oz in an lb = $0.07 per oz of soap.  Is that correct, or did I miss something?
  Gee, for a hospital CEO, simple math seems to be difficult suddenly.


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## Gryfonmoon (Jan 15, 2013)

Do you include shipping in your costs?


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## DWinMadison (Jan 15, 2013)

kdaniels8811 said:


> Wow, you guys have expensive ingredients.  I track my cost and even with expensive essential oils, I am at about $1.10 per bar which weighs about 4 ounces.



I'm not in the "business" and I'm just experimenting, so I have been buying in small quantities.  $15 for 2 lbs of lye at Lowes, $10-ish for EO from the local health food store.  Oils from Kroger and Walmart.  The cost surprised me too.  That's why I asked.  I already see that I can get lye for about half this price from ebay with no shipping.  That will help as I estimate lye to contribute to about *HALF* the current cost of my soap per ounce.

Thanks to all you soap professionals out there for your assistance.


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## DWinMadison (Jan 15, 2013)

Gryfonmoon said:


> Do you include shipping in your costs?



I did not.  Mom lives in Birmingham, the next state over, and she may pick it up or I may drive it over to her...it's a good excuse to see her for extra brownie points :shh:  I also did not include any packaging, because her mission team wants to package them once they arrive in Thailand to save space....plus I have NO idea how to package soap.


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## Desert Karen (Jan 15, 2013)

I'm still in my infancy here. I started making soap the week between Christmas and New Years. I estimated my soap to cost me around $2.00 to $2.50 per bar depending on what essential oils I am using. I am using organic oils and essential oils, some of which are very expensive. I made a wonderful shampoo bar that had a lot of Tea Tree oil in it as well as Peppermint Oil and mica to color it. Since then I have been out to Clark's, a store that carries essential oils, and certified organic powders, etc. I have not calculated the cost of "production" because I am having a blast making soap. Eventually I'd like to make some money making soaps. Social Security sucks!


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## Desert Karen (Jan 15, 2013)

*Shipping costs*



Gryfonmoon said:


> Do you include shipping in your costs?



I will be taking a few soaps to a postal annex, along with a couple of sizes of envelopes to see which carrier will be the least expensive. You can't send oils that have a low flash point through the post office, and I'm wondering if that is the same for oils that has been made into soap.


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## DWinMadison (Jan 15, 2013)

Desert Karen said:


> I will be taking a few soaps to a postal annex, along with a couple of sizes of envelopes to see which carrier will be the least expensive. You can't send oils that have a low flash point through the post office, and I'm wondering if that is the same for oils that has been made into soap.



How could they possibly know what's in your soaps?  I can't imagine that even if they inspect it that soap would cause a concern.


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## Desert Karen (Jan 15, 2013)

Desert Karen said:


> I'm still in my infancy here. I started making soap the week between Christmas and New Years. I estimated my soap to cost me around $2.00 to $2.50 per bar depending on what essential oils I am using. I am using organic oils and essential oils, some of which are very expensive. I made a wonderful shampoo bar that had a lot of Tea Tree oil in it as well as Peppermint Oil and mica to color it. Since then I have been out to Clark's, a store that carries essential oils, and certified organic powders, etc. I have not calculated the cost of "production" because I am having a blast making soap. Eventually I'd like to make some money making soaps. Social Security sucks!



Oops I forgot to add that my first oils, essential oils, lye, etc. I bought on line. I paid for shipping and added that into my first three batches. Now I am shopping at Clarks Nutrition and Sprouts for the things I need, so my cost will be much lower, I am purchasing larger amounts as well. We are not figuring in gas, as for hubby and I, a trip across town is a day away from home, and we enjoy getting out. Hubby is an ex banker type, and loves numbers. I'll have him calculate out what each bar costs. I received a note from someone who came onto my Facebook page, and asked why my bars were $6.00. She said she was buying soaps for $3.00 and gave me the web site. Well YEAHAAAA She was using TWO oils. $3.00 is good for a Castille bar that's basically olive oil without any essential oils in it. I lowered my bars down to $5.00 but I'm going to charge shipping.


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## Maythorn (Jan 15, 2013)

No, PO is only interested in the fragrances in liquid form under a certain flashpoint.  But I recently had little on ozers with FPs below 200 degrees come to me via PO, not ground, because the amount was so small.  

If you weigh your pkg you can plug in the weight, size, where it coming from and going to and get a shipping quote on USPS website for priority or parcel post or first class if small.


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## Desert Karen (Jan 15, 2013)

DWinMadison said:


> How could they possibly know what's in your soaps?  I can't imagine that even if they inspect it that soap would cause a concern.



I don't know. I will find out though. My son is a letter carrier. He might know, but I assume they wouldn't know unless you tell them. All my supplies I bought on line came UPS.


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## Gryfonmoon (Jan 15, 2013)

Desert Karen said:


> I will be taking a few soaps to a postal annex, along with a couple of sizes of envelopes to see which carrier will be the least expensive. You can't send oils that have a low flash point through the post office, and I'm wondering if that is the same for oils that has been made into soap.



That's a good question, but I just don't think it'll be a huge issue if you have a few MLs in a bar. It's not really concentrated in it's pure form -and its not even in it's original form- kinda like lye sometimes requires special handling if sold in it's pure form but as soap it's not even lye anymore, you know?


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## DWinMadison (Jan 15, 2013)

Desert Karen said:


> Oops I forgot to add that my first oils, essential oils, lye, etc. I bought on line. I paid for shipping and added that into my first three batches. Now I am shopping at Clarks Nutrition and Sprouts for the things I need, so my cost will be much lower, I am purchasing larger amounts as well. We are not figuring in gas, as for hubby and I, a trip across town is a day away from home, and we enjoy getting out. Hubby is an ex banker type, and loves numbers. I'll have him calculate out what each bar costs. I received a note from someone who came onto my Facebook page, and asked why my bars were $6.00. She said she was buying soaps for $3.00 and gave me the web site. Well YEAHAAAA She was using TWO oils. $3.00 is good for a Castille bar that's basically olive oil without any essential oils in it. I lowered my bars down to $5.00 but I'm going to charge shipping.



I've only found 1 specialty soap store here in Jackson, MS.  Their soaps are $8.95 each. http://bk2natur.com/shop.html I was thinking about the local gift merchants, and I don't remember seeing any soap in their stores either...of course I probably wouldn't have noticed because I just got interested in the subject, and I HATE shopping.


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## Desert Karen (Jan 15, 2013)

Maythorn said:


> No, PO is only interested in the fragrances in liquid form under a certain flashpoint.  But I recently had little on ozers with FPs below 200 degrees come to me via PO, not ground, because the amount was so small.
> 
> If you weigh your pkg you can plug in the weight, size, where it coming from and going to and get a shipping quote on USPS website for priority or parcel post or first class if small.



SERIOUSLY??? I had no idea you could do that. Ebay, or those that sell on ebay, use a label that say;s ebay on it. I wondered how they did that. I have a scale to weigh my oils, etc. on. I think I'll check out the PO site tomorrow....although I forgot AGAIN to grab some envelopes at Wal Mart tonight.


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## Maythorn (Jan 16, 2013)

Walmart is where they are the cheapest that I've found.:smile:


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## gratia (Jan 16, 2013)

DWinMadison said:


> Lye Cost per Oz	 $0.47
> 
> 
> [*]Actual cost of lye purchased from Lowes @ $15 for 2lbs



Thats quite high for the price of lye, no? Maybe I am reading something wrong?  I get mine at our local "Mom and Pop" hardware store and I pay about 3.50 per lb, which is kind of high, but I don't want to pay the shipping when I can get it when needed.

Bulk, bulk, bulk.


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## green soap (Jan 16, 2013)

DWinMadison said:


> Actually, the number was indeed supposed to be $0.16 *per ounce* of soap, but now that I check it, I believe it's actually $0.07 based on these assumptions:  $10 for a 4 ounce bottle (that's an estimate based on the lavender and tea tree oil I just bought, but I know that EO cost varies greatly based on the oil, source, quantity, etc).  Anyway, 4 oz =  8 Tbsp, so $10/8 = $1.25 per lb assuming 1 Tbsp per lb of soap.  This divided by 16 oz in an lb = $0.07 per oz of soap.  Is that correct, or did I miss something?
> Gee, for a hospital CEO, simple math seems to be difficult suddenly.



I am sorry, I thought you meant $0.16 per oz of fragrance oil.  I see that you are calculating the costs per ounce of soap!  This makes a lot more sense now.

Just a side comment.  I have been weighing my EOs and find that most are 11 g per tablespoon, so not quite a half oz (28.5 g per oz).


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## AngelMomma (Jan 16, 2013)

We recently got lye at a local chemical supply.  Talk about cutting cost!  Its a 50lb bag.  They quoted us a price just over $50.00.  But when they rang my husband up it was $47something.  I'm guessing they gave him a military discount because he had just gotten off work and was in uniform.  If I ever decided to sell I would have to start buying in bulk 50lb for my main oils.  I just wouldn't be able to stand the thought that I could be making more profit if I was ordering some of the main oils online.


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## ErikWeaver (Jan 22, 2013)

Personally, I would skip the color and fragrance, but I really do like pure ol' soap, so I'm biased, heheh. Also, I like the look of natural soap and I enjoy seeing the variations as I modify the recipe. With regard to fragrance some people are sensitive to those, so I'm not sure I'd personally recommend it for a church "mission" soap. 

According to my spreadsheet I'd say you are in the ball park. I pay less for my sodium hydroxide but if you are buying it locally at the hardware store you have to deal with what is available, and that is always higher. My best price so far was from Bulk Apothecary, and my worse at Lowe's (50-cents per oz! ouch!). Roebic and Rooto were two brand names (drain cleaner) if you go the local route. 

http://bulkapothecary.com/buy-sodium-hydroxide-lye.htm 

But your oils look a little expensive to me. I can buy a 101-oz jar of olive oil at my Sam's Club for about 12-cents/oz (cpo). Crisco comes in at less than 10 cpo, and sunflower seed oil just a couple cents more. I even found coconut oil (77-degree) at both my local Dillions and Wal-Mart Super Center (but only at one of the four nearest WMSC, so calling around might save gas money). The coconut oil averaged about 20 cpo bewteen them. 

I like to add oatmeal (quick cook, and made into a flour with my electric nut chopper) to some recipes and that comes in at just under 7 cpo, using about 6-oz per 7 or 8 pound batch. That's pretty good for a cheap and natural exfoilant, to my way of thinking anyway. 

Making a basic oatmeal-coconut-olive-shortening oil soap I came in right at 67 cents PER BAR for a full sized 30-bar recipe. If I recall they averaged about 3.5-oz per bar, and I had just a little waste in the end cut/slivers. Basically, it was $20 for the recipe, and I got 30 good bars of soap out of it. $20/30 = $0.67 per bar... 

(I don't know if this is going to format properly, but here goes!)

.......................................................................................Per Oz............ Total
Shortening 38 oz 0.06792 *2.58096* Olive Oil 24 oz 0.17584 *4.22016* Coconut Oil 24 oz 0.19873 *4.76952* Lye 12 oz 0.50375 *6.045* Oatmeal 8 oz 0.06167 *0.49336* 
 
 
 *SUBTOTAL = * *18.109* 

Hope that helps. 
Erik


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## ErikWeaver (Jan 22, 2013)

OK, terrible formatting! ug! Trying again.... 

Ingredient---Used------$/Oz------Tot$/Item
Shortening... 38 oz... 			0.06792.....$ 			2.58096 
Olive Oil........ 			24 oz.... 			0.17584.....$ 			4.22016 
Coconut Oil.. 			24 oz... 			0.19873.....$ 			4.76952 
Lye............... 12 oz... 			0.50375.....$ 			6.045 
Oatmeal......... 			8 oz..... 			0.06167.....$ 			0.49336 
===============================
SUBTOTAL................................ =  18.109


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## melstan775 (Jan 22, 2013)

Thanks for breaking that down. I know I could benefit from it, so I am sure others can too. If you add packaging and labor into your cost, how much do you think your total production per bar is?


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## rodeogal (Jan 29, 2013)

Thanks for the breakdown.  You are the second person I have seen on this forum that uses shortening/lard as the bulk ingredient. Very interesting to see the different recipes.  All my recipies are at least 41% olive oil.  That is the way I was taught, and have just continued to formulate that way.  I come in right under $1 per 4.5 ounce bar with materials and labels.

However, if I add labor then multiply by 2.35 for the wholesale price, then by 2 for the retail price, I should be charging approx. $6.60 per bar (according to the resources that were given to be on another thread).  I don't have my bars priced that high.  Pricing is the tricky part for me!  On the Internet, I see prices anywhere from $0.90 an ounce of soap to $1.65 an ounce of soap and I wonder if the consumer really knows how to tell the difference or if they just shop by price.  

Any thoughts?


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## 2lilboots (Jan 29, 2013)

I think most consumers buying homemade soap are buying the scent, the colors, and the ingredients they like.  If they want it the cost isn't the big deal for them, they will buy it.


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## ErikWeaver (Jan 30, 2013)

Packaging costs depends upon the packaging   heheh. It can be as simple as cutting a piece of printer paper to fit around the bar and taping it in place, on up to however complicated you care to make it. For direct sales I like the idea of being able to see the soap. For the mission soap that would not matter, nor would fancy packaging. I'd suggest bulk packaging, like a packing slip in a comfortable sized box, and be done with it. But it also depends upon what the customer wants. 

For labor I set a timer and time myself. Then you can calculate time per bar. Multiply that by the wage you wish to earn. Remember to plan on setting aside about 25% of your income for income taxes. 

As to percentages of shortening/lard vs. olive oil that depends on the soap recipe. I've also made Castile, and that is 100% olive oil. So it just depends.


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## rodeogal (Jan 30, 2013)

ErikWeaver said:


> As to percentages of shortening/lard vs. olive oil that depends on the soap recipe. I've also made Castile, and that is 100% olive oil. So it just depends.


 
Erik, do you also price your soaps according to the recipe?  We have had this discussion (somewhere) on here.  For simplicity sake, I price mine all the same.


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## ErikWeaver (Jan 31, 2013)

Well, yes and no. I break my soaps into unscented and scented/essential oils. Because FO/EO cost so much I do price them differently than the unscented soaps.


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## ZandarKoad (Jan 31, 2013)

rodeogal said:


> Thanks for the breakdown.  You are the second person I have seen on this forum that uses shortening/lard as the bulk ingredient. Very interesting to see the different recipes.  All my recipies are at least 41% olive oil.  That is the way I was taught, and have just continued to formulate that way.  I come in right under $1 per 4.5 ounce bar with materials and labels.
> 
> However, if I add labor then multiply by 2.35 for the wholesale price, then by 2 for the retail price, I should be charging approx. $6.60 per bar (according to the resources that were given to be on another thread).  I don't have my bars priced that high.  Pricing is the tricky part for me!  On the Internet, I see prices anywhere from $0.90 an ounce of soap to $1.65 an ounce of soap and I wonder if the consumer really knows how to tell the difference or if they just shop by price.
> 
> Any thoughts?



I'm using mostly Olive Oil as well, and some coconut.  Then a tiny amount of Castor Oil.  Here's my breakdown (in cost per ounce of PRODUCT, not soap): 

*$0.4476  (Castor Oil)
$0.3228  (Extra Virgin, Organic Coconut Oil)
$0.1528  (Extra Virigin Olive Oil)
$0.214  (Lye)
0.00749  (Steam Distilled Water)

*
I failed to weigh the batch before cutting, and I figure it's most accurate to weigh all the bars after they are done drying (they do loose water weight over time).  But I'm estimating at around 79.2 ounces final weight.  So that would put my total cost per ounce of soap at $0.213.  No smells or spells (colors).


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## judymoody (Jan 31, 2013)

My bars (4.5-5 ounces cured) cost somewhere between $1 and $1.25 in materials, depending on my oils and EO choices.  My base recipe is coconut, palm, olive, castor, and cocoa butter.  I buy FO and EO in increments of 4 to 16 ounces depending on what it is and the expected shelf life.  Lye for $1.50-2/lb including shipping.  Base oils from Soapers' Choice in the gallon containers, except for OO which I get from Costco.

Buying in bulk (50 lb increments for oils and lye) would bring the cost down considerably.

I haven't calculated my labor costs.  I am primarily a hobbyist and do this for fun.  If I added in the time required for book keeping, packaging, shipping, maintaining a website, transaction fees, etc., I don't know if it would be worth my time.  As a creative endeavor that provides me a ready supply of gifts for friends, teachers, etc., it is very satisfying.


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## Lilahblossom (Feb 14, 2013)

I'm glad you all have posted these numbers. Thankyou!


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## LuvOurNewf (Feb 14, 2013)

2lilboots said:


> I think most consumers buying homemade soap are buying the scent, the colors, and the ingredients they like.  If they want it the cost isn't the big deal for them, they will buy it.



This is how I look at it also. I figure that the consumers are "buying" homemade/handmade soap and such.

Now if they were "shopping" for it the only thing that would matter would be the price.


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