Have I Calculated My Cost Correctly?

[Tai777]

Can someone tell me if I have calculated this correctly? I really hate math. Take a look at the prices of my supplies.

Palm Oil - $13.16 (7 Lb. bottle) $1.88 per Lb, .12¢ per Oz.
Coconut Oil - $13.79 (7 Lb bottle) $1.97 per Lb, .12¢ per Oz.
Olive Oil - $20.09 (7 Lb bottle) $2.87 per Lb, .18¢ per Oz.
Almond Oil - $24.36 (7 Lb bottle) $3.48 per Lb, .22¢ Oz.
Cocoa Butter - $40.16 (10 Lbs.) $4.01 per Lb, .25¢ Oz.
Castor Oil - $17.78 (7 Lb bottle) $2.54 per Lb, ..16¢ Oz.
Fragrance Oil - ($10.00 (8 Oz.) $1.25 per Oz
Lye - $14.98 (2 Lb. bottle) .47¢ per Oz.
Distilled Water -.89¢ (per gallon) .7¢ per Oz.

I made 6 Lbs of soap that came to 23 bars of soap.

Total cost for only oils/butter was $15.11
Total cost for fragrance, lye and Distilled water was $14.28

Total cost of supplies - $29.39

I divided $29.39 (my total cost) by the number of bars I made which was 23.
My cost per bar comes to $1.28

Is this correct? Please let me know my head hurts from all of this calculating.

Tai

 

[lsg]

I haven't gone through all of your calculations, but don't forget packaging, labels, ink for the printer etc. If you really want to get technical you should also figure in your labor, but I never do.

 

[Smee]

Without breaking out the cipherin' stick, I'd say your math looks right.
I'm a bit surprised at the cost per bar. Mine lean toward under $1.
Cocoa butter and almond oil sure can add up, can't they?

 

[Rich23s]

I can't completely doublec check your costs without knowing what % you use in your recipe, however the base cost of the oils seems to be correct. Don't forget shipping, packaging, etc.

 

[CaliChan]

If you have microsoft excel that will help you a lot
I punched the numbers in and they're all correct.
I punched this out for you as an example.

 

[rodeogal]

The only thing I can see right away is the cost of your lye. It seems high. I can buy it locally for $3.69 a pound and cheaper online. Maybe you can get your costs down so you can make a profit if you decide to sell later. Also, how much do your bars weigh? Most of the people I see selling are getting between $1 and $1.50 an ounce for their bars, if that helps any.

 

[Badger]

CaliChan, I wish I could do as nice a program with excel as you have there... I might be able to do that eventually, but it would take me at least a month most likely (and a lot of naughty words).

 

[Seifenblasen]

Just a word of caution- you are doing some rounding off to come up with the cost per oz. and I assume you add up the cost per oz. to come up with your total costs for 23 bars. It doesn't matter in small batches, but if and when you make hundreds of bars a week, all those rounded off numbers will add up and affect your real costs.

 

[Smee]

CaliChan, I wish I could do as nice a program with excel as you have there... I might be able to do that eventually, but it would take me at least a month most likely (and a lot of naughty words).

Naughty words, eh? Have I got the soap for you!!!

 

[Moonshea Botanicals]

If you have microsoft excel that will help you a lot
I punched the numbers in and they're all correct.
I punched this out for you as an example.
View attachment 1567

is this straight Excel. Or is this the Soapmaker software?

 

[Tai777]

Thanks Everyone

Hi Everyone,

Yes I know that the cost of my lye was high but I found a new supplier for Lye it will knock down my price of .47 per Oz to .8 per Oz...which will bring my bar cost to $1.00! Yeah!

Seifenblasen, is there another way to calculate cost per Oz. without rounding off?

Cocoa butter is expensive but I will be using unrefined which is so much cheaper from now on. I will have to suck up the cost for the Almond Oil.

I know I also have to add the cost of packaging, labels, ink, etc. but I just wanted to figure out the cost of one bar of soap first.

Thanks everyone for all your priceless help.

Happy Soaping!

Tai

 

[Seifenblasen]

I would calculate the total costs of making a huge batch of soap, say, 50 or 100 lbs., when you would use entire bottles of oil, then divide it by the umber of bars, be that 230 or 460.

What happened with you original calculations is you divide the costs by 7 (to get the per lb. costs from a 7-lb bottle), then you divide that by 16 (to get the per oz. cost), then you times that by how ever many oz. you use in a 5-lb batch, then you divide that by 23. During each step the number is rounded, so the more steps you go through, the more error you incur.

If you are handy with Xcel (or other spreadsheets), CaliChan has a great approach. Once you enter the formula, all you have to do is plug in the numbers.

 

[CaliChan]

is this straight Excel. Or is this the Soapmaker software?

That's just regular excel
I took a computers class in middle school thinking it would never help me in the real world. Boy was I wrong! They have tutorials on YouTube on how to add, divide, multiply etc. But its really easy once you get the hang of it.

 

[ruby61]

Has anyone used craftybase? It is a good way to keep track of your business cost and supplies. Also if you do shows and want to see what products sell the most by keeping an inverntory and sales.
There is a free 2 week period going on right now.
www.craftybase.com

 

[melstan775]

Naughty words, eh? Have I got the soap for you!!!

Oh naughty words soap huh? Like what???

 

[lsg]

The SoapMaker software is really not that expensive and I really use mine. You can get the lite version for about fifty bucks.

http://www.soapmaker.ca/purchaseForm.php

 

[Seifenblasen]

That's just regular excel
I took a computers class in middle school thinking it would never help me in the real world. Boy was I wrong! They have tutorials on YouTube on how to add, divide, multiply etc. But its really easy once you get the hang of it.

I use Excel A LOT at work for project cost estimate/projection, as well as investment analysis. Cannot imagine life without it! :shock:

It is also handy for keeping track of inventory. I don't sell, but it is easy to to link the inventory to costs as well. This is just an example of my list - pink means I need to re-order, blue cells mean I don't like the product and will not re-order when I run out.

 

[Lindy]

I use SoapMaker exclusively.....

I also add in the cost of my packaging including labels and wages. When you are ready to start selling you would then take the cost of your soap x 2 for wholesale and x 4 for retail. If you are selling for less you're ROI (return on investment) makes it totally not worth selling.

Eventually I want to get my costs lower by buying in larger amounts so my ROI will be more fitting as to what it should be in business.

Back to the OP = your costs do look right and there is nothing wrong with rounding your numbers up.

 

[Tai777]

Thanks Everyone

I want to thank everyone for all your helpful advice.

I can't afford SoapMaker software right now but maybe in the future. I will try to create an Excel spreadsheet for now.

Seifenblasen, thank you so much for showing me that really cool spreadsheet you've created. I will try to whip one up too.

CaliChan, what is your approach? Do you also use a spreadsheet like Seifenblasen?

I don't know what I would have done without this helpful site :-D

Happy Soaping!

Tai

 

[Seifenblasen]

Mine is pretty simple. CaliChan's spreadsheet actually calculate costs. :grin: Would be glad to help if you need help with the spreadsheet.