Dont know how much to charge for soapmaking!

[terrasmiles]

Greetings Everyone!

I am the owner of Terra Smiles you can check my page here www.etsy.com/shop/terrasmiles

I am on the verge of being in Whole Foods and we have been pretty successful just starting out 2 years ago. At the farmers market a lady approached me to make Greek soap for her. She wants me to hot process 12-15 5lb logs. She will be providing all the ingredients, but I am not sure what I should charge her for time and manual labor. Do I charge her hourly? Do I charge by batch. I am confused as to how much I should charge her for it. If any of you are in the same boat and have any numbers to throw out there that would be greatly appreciated. I am funny with money and do not want to sell my self short.

Many thanks!

 

[marketingmentor]

Hi, I sell whole food for 18 years. I have made may different bath and body products and sold them to several different channels. I have been on HSN, drugs stores, specialty stores and mass market.
When you start selling to stores like whole foods, they may want you to go through a distributor. In recent years, buying local is a big theme, so you may not have to sell the distributor first.
Distributors charge you 25%. Your pricing needs to include all your labor, inner and outer packaging, marketing materials for the store.
A safe pricing is take all your costs and multiply it by 8 or 10. Check to see if that price is market price for all other soaps.
In addition, once you sell whole foods, you can approach the chain in each region to sell them too. You would need national sales brokers who will charge 10 or 15%. You also need to plan yearly promotions with discounts.

If you want to sell gift stores your mark up is lower
I hope that helps.

 

[Lindy]

Terrasmiles - since they are going to provide the ingredients you will need to determine how long it is going to take you to make the product. Then determine how much you want to make an hour, personally since you are a crafts person you should be charging at least $25.00 an hour. The other way you could do it is to calculate how much that soap would cost if you were supplying the ingredients then x that by 2 for wholesale (make sure you have your labour in there) and then deduct the cost of ingredients and that should give you the cost you are may want to charge., Either of these formulas will work, you just have to decide which one you want to use.

Also make sure that they are either supplying their own shipping pick-up or you are being paid for it.

 

[terrasmiles]

thank you so much!

 

[Lindy]

You're welcome...