When friends want to buy my “gifts”

[LynetteO]

@Zany_in_CO @Zing @TheGecko @AliOop
How does one charge a friend for items that one makes but doesn’t typically sell? I don’t sell but do gift. I’ve been gifting bath products & candles for 3 years. I now have a few friend asking for special orders. I have been calculating my cost. I have been forgetting that I paid tax on ingredients as well. Oops. Anyway, everyone has always paid me more than I “charged”. Should I just leave it like that?
So hard to know. I love to make this stuff so it’s not like it’s a chore. However the ask today was for 2 lotion bars (one in a tin, one without), 5 soaps, one sisal bag, one candle & one lip balm tin. My cost $25.50.

 

[KiwiMoose]

I would charge the cost of the ingredients/packaging (including the tax you paid) etc, plus 10%.
I do sell and I have three prices - my cost price (as above), my wholesale price (double the above), and my retail price (wholesale plus 80%)
Bear in mind that I don't calculate time spent making soap, only the ingredient/soaping tools/packaging costs, so my wholesale cost is what I sell to friends/family for. And they sometimes get little bars thrown in here and there as a gift with purchase.
I don't know what the going rate is for your items listed above but I would say that you are losing money there, and my rough estimate would be $35 for those items.

 

[Carly B]

@Zany_in_CO @Zing @TheGecko @AliOop
How does one charge a friend for items that one makes but doesn’t typically sell? I don’t sell but do gift. I’ve been gifting bath products & candles for 3 years. I now have a few friend asking for special orders. I have been calculating my cost. I have been forgetting that I paid tax on ingredients as well. Oops. Anyway, everyone has always paid me more than I “charged”. Should I just leave it like that?
So hard to know. I love to make this stuff so it’s not like it’s a chore. However the ask today was for 2 lotion bars (one in a tin, one without), 5 soaps, one sisal bag, one candle & one lip balm tin. My cost $25.50.

Does the person who made the request expect to pay? I gift a ton of stuff (since I don't sell, I'm happy to find a home for my soaps so I can make more ), and I usually don't charge for custom stuff either, because I get the fun of making it, but once I had a special request for lavender soap, and the requester insisted on giving me something, so we bartered.

I give her soaps and I get gorgeous homemade sourdough boules and other goodies. So it was a win/win as far as we both were concerned. But it was just soap.

For things that you have to purchase, like the tins and sisal and candle container, I would tell the person that I don't make them so I need to order them from one of my suppliers, so they are more than welcome to reimburse me for those costs. Or you can call it early Christmas, birthday, or whatever.

Or you could just leave it the way it is if you're comfortable with it

 

[LynetteO]

Does the person who made the request expect to pay? I gift a ton of stuff (since I don't sell, I'm happy to find a home for my soaps so I can make more ), and I usually don't charge for custom stuff either, because I get the fun of making it, but once I had a special request for lavender soap, and the requester insisted on giving me something, so we bartered.

I give her soaps and I get gorgeous homemade sourdough boules and other goodies. So it was a win/win as far as we both were concerned.

Yes. She wants to pay me for the items.

I would charge the cost of the ingredients/packaging (including the tax you paid) etc, plus 10%.
I do sell and I have three prices…
and my rough estimate would be $35 for those items.

Thank You That is quite helpful!

 

[Zany_in_CO]

So hard to know.

It's great that your friends want to support your habit! You honor them and yourself when you charge enough to cover

costs X 2.5 = Wholesale
costs X 3.5 = Retail
Cost of container added in separately. No up charge.

So, now is as good a time as any to start tracking actual cost to make:

I use the shipping invoice to note the cost per oz. (or gram or fl.oz).
I add shipping + tax + handling and divide that by the number of items in the shipment and add that number to the cost of each item.

I use the recipe to note the actual cost to make
Ingredient X number of ounces in the recipe = cost
Do that for each ingredient in the recipe to get the total batch cost.

This is an over simplification of the process but that's the way I do it.
There are programs that figure it out for you but I never felt the need to do that.

HTH

 

[LynetteO]

It's great that your friends want to support your habit! You honor them and yourself when you charge enough to cover

costs X 2.5 = Wholesale
costs X 3.5 = Retail
Cost of container added in separately. No up charge.

So, now is as good a time as any to start tracking actual cost to make:

I use the shipping invoice to note the cost per oz. (or gram or fl.oz).
I add shipping + tax + handling and divide that by the number of items in the shipping and add that number to the cost of each item.

I use the recipe to note the actual cost to make
Ingredient X number of ounces in the recipe = cost
Do that for each ingredient in the recipe to get the total batch cost.

This is an over simplification of the process but that's the way I do it.


HTH

Thank you. Quite helpful. I am taking notes.

 

[Zany_in_CO]

I don't know what the going rate is for your items

Good to know the "going rate"!
Doing a little research on Etsy or wherever to find out what similar handcrafted items are selling for would be well worth the effort and keep prices in the ballpark.

 

[AliOop]

@LynetteO when friends or family request special orders, I typically charge for the cost of supplies and ingredients, rounding up to the nearest whole number that is a multiple of five or ten, like $5, $10, $20, $35, etc. The rounding is only because I hate monkeying around with cashing checks or making change.

I do include labels, tins, bags, etc., as part of the cost. Just like ingredients, I had to research them, order them, unpack them, and dispose of the packaging. For containers, I also had to wash them, disinfect them with alcohol, clean them up after filling them, put labels on them, etc. For those reasons, I do include any packaging in the total cost, before adding a multiplier for wholesale or retail.

In my area, the general rule of thumb is that wholesale = costs x 2, and retail = costs x 4. HTH!

 

[TheGecko]

@Zany_in_CO @Zing @TheGecko @AliOop
How does one charge a friend for items that one makes but doesn’t typically sell? I don’t sell but do gift. I’ve been gifting bath products & candles for 3 years. I now have a few friend asking for special orders. I have been calculating my cost. I have been forgetting that I paid tax on ingredients as well. Oops. Anyway, everyone has always paid me more than I “charged”. Should I just leave it like that?
So hard to know. I love to make this stuff so it’s not like it’s a chore. However the ask today was for 2 lotion bars (one in a tin, one without), 5 soaps, one sisal bag, one candle & one lip balm tin. My cost $25.50.

I sell, so it depends on how well I like them and what they are wanting (and how they ask). I adore my BIL and even though Chocolate Espresso is my "fanciest' soap, he orders a loaf (10 bars) and is okay if I put it in a box...$20. Like my BIL, K orders by the loaf, but I don't like him as much so I charge him $30. One of the gals from one of my crafting groups loves my soap, but has allergies so I have a special recipe for her. I'd just give her the soap, but she insists on paying so I do 'test' batch sizes for her for $5.00...covers the cost of the FO.

 

[Zing]

View attachment 67933

 

[LynetteO]

Good to know the "going rate"!
Doing a little research on Etsy or wherever to find out what similar handcrafted items are selling for would be well worth the effort and keep prices in the ballpark.

When I sold some lotion bars for $2.00 each or 3 for $5.00 to school nurse she was over the moon happy with price and she mentioned she had looked at locally owned skin care shop. They are a “fancy” place & so I looked up their price. They sell same lotion bar size, in 1.5 oz round bee mold that I use & they retailed for $17. That is highway robbery! How on earth can they charge that? And who’s buying them?

 

[Zing]

Hobbyist here who doesn't sell to friends. However, several people frequently ask to buy a batch so that they can give as gifts to people that I don't know. I charge $5 per bar of soap and $4 for a lotion bar.

I would LOVE to calculate the cost of ingredients. But the bottle label is in fluid ounces and how do you subtract the weight of the bottle and it just seems like a complicated equation.

The famous neighborhood artisan here sells his soap for cheap and his small lotion bars are hugely expensive. My friends tell me to increase the cost of lotion bars. My wife thinks that soap is "everyday common" and lotion bars are more "self care bath and body special" and should be priced higher. Lotion bars are so cheap and easy -- and you all know what goes into cold process soap!

Anyhoo, @LynetteO , good luck -- keep us posted.

EDIT: I just posted this and then saw the mention of $17 -- I've seen $17 too! And it's not even jojoba or fancy schmancy butters -- like cocoa butter, beeswax, and coconut oil! What the kitten love?!

 

[Zany_in_CO]

the bottle label is in fluid ounces and how do you subtract the weight of the bottle

Um, if you have an empty bottle handy, put that on the scale. Hit "Tare". Take the empty off. Put the bottle of fluid ounces on. There you have it.

That being said, I do agree that the more you grow, the more complicated it gets.

I would charge $5 for the lotion bar as well. Just makes more sense to me to work with round numbers.
Just stay away from the $4.95-ish type thing... makes me want to gnash my teeth!

 

[Christa10]

I have spreadsheets that I made that calculates the cost of everything that goes into a given product, adds shipping and all other materials, such as bottling and labeling. Then I do research on how much a similar product would cost on amazon, etsy, etc., and come up with a sales cost. Then I can calculate the profit by both dollar amount and percentage. Once you set it up one time, it takes all the guesswork out of it. If the cost of an ingredient changes I can change that in the spreadsheet and update all my numbers automatically. That may sound tedious but changes don't happen all the time so it's pretty stable. But then, I love spreadsheets, so if you don't, or don't know how to use Excel, then it won't work for you. I will say, it's a good tool to know if you're doing a business though.

 

[Michelle0803]

I have spreadsheets that I made that calculates the cost of everything that goes into a given product, adds shipping and all other materials, such as bottling and labeling. Then I do research on how much a similar product would cost on amazon, etsy, etc., and come up with a sales cost. Then I can calculate the profit by both dollar amount and percentage. Once you set it up one time, it takes all the guesswork out of it. If the cost of an ingredient changes I can change that in the spreadsheet and update all my numbers automatically. That may sound tedious but changes don't happen all the time so it's pretty stable. But then, I love spreadsheets, so if you don't, or don't know how to use Excel, then it won't work for you. I will say, it's a good tool to know if you're doing a business though.

I do the same. It really helps to know my cost per ounce and cost per item. I sell mostly at farmers markets and events so I like to be able to offer discounts for other vendors and still make something off of my products and thos is the best way I have found.

 

[TheGecko]

I have spreadsheets that I made that calculates the cost of everything that goes into a given product, adds shipping and all other materials, such as bottling and labeling.

I started out with a really simple spreadsheet because I have never progressed beyond the basics, but needing to include shipping, packaging and labels and know that cost can fluctuate between orders...from the ingredients (who hasn't had to open a new bottle or bucket in the middle of a batch) to the cost of shipping AND needing to track inventory...I purchased SoapMaker 3. It functions on LIFO so I always know what the soap is going to cost when I go to make a batch...except for labor (that gets added in later).

 

[Christa10]

I do the same. It really helps to know my cost per ounce and cost per item. I sell mostly at farmers markets and events so I like to be able to offer discounts for other vendors and still make something off of my products and thos is the best way I have found.

I like the idea of offering vendors a discount. Seeing each cost category broken down in a spreadsheet with the markup, profit and percentage helps to identify what you can discount and feel good about knowing that you're still coming out a bit ahead.

 

[~Dragonfly~]

I just made my first sale yesterday. I've been making my lotion bars in those round push up containers. I guess you would call them lotion sticks? Anyway, a long-time friend and I recently started working at the same place. She's been kind of my tester, so I brought her a new recipe. She was using it in the break room and another employee asked her what she had. Friend asked me if I could bring in one for "Jane". I had one that wasn't full so gave that to Jane. Jane loves it. I asked Jane what she would expect to pay for one of these and she said $12, and my chin probably about hit the floor. I was thinking of selling them for $5, so we decided $8 would be a good deal. To make a long story short, I sold 6 lotion sticks yesterday at $8 each to 3 different coworkers. I probably could have sold more if I had brought more, but I only brought 2 of each scent for one particular person to choose from. The other 2 people weren't planned sales at all. They cost $2.64 in materials (each) to make. That doesn't include my time to make them, to research materials, the electric/gas to heat the oils, etc. I agree $17 sounds pretty pricey, but I'm thinking those people probably have overhead for web presence, store presence, employee costs, electicity, and so forth.

 

[Zing]

I just made my first sale yesterday. I've been making my lotion bars in those round push up containers. I guess you would call them lotion sticks? Anyway, a long-time friend and I recently started working at the same place. She's been kind of my tester, so I brought her a new recipe. She was using it in the break room and another employee asked her what she had. Friend asked me if I could bring in one for "Jane". I had one that wasn't full so gave that to Jane. Jane loves it. I asked Jane what she would expect to pay for one of these and she said $12, and my chin probably about hit the floor. I was thinking of selling them for $5, so we decided $8 would be a good deal. To make a long story short, I sold 6 lotion sticks yesterday at $8 each to 3 different coworkers. I probably could have sold more if I had brought more, but I only brought 2 of each scent for one particular person to choose from. The other 2 people weren't planned sales at all. They cost $2.64 in materials (each) to make. That doesn't include my time to make them, to research materials, the electric/gas to heat the oils, etc. I agree $17 sounds pretty pricey, but I'm thinking those people probably have overhead for web presence, store presence, employee costs, electicity, and so forth.

Score!

 

[bassmasterskip]

Hobbyist here who doesn't sell to friends. However, several people frequently ask to buy a batch so that they can give as gifts to people that I don't know. I charge $5 per bar of soap and $4 for a lotion bar.

I would LOVE to calculate the cost of ingredients. But the bottle label is in fluid ounces and how do you subtract the weight of the bottle and it just seems like a complicated equation.

The famous neighborhood artisan here sells his soap for cheap and his small lotion bars are hugely expensive. My friends tell me to increase the cost of lotion bars. My wife thinks that soap is "everyday common" and lotion bars are more "self care bath and body special" and should be priced higher. Lotion bars are so cheap and easy -- and you all know what goes into cold process soap!

Anyhoo, @LynetteO , good luck -- keep us posted.

EDIT: I just posted this and then saw the mention of $17 -- I've seen $17 too! And it's not even jojoba or fancy schmancy butters -- like cocoa butter, beeswax, and coconut oil! What the kitten love?!

Just as a side note when a bottle labels fluid oz that is the weight of just the fluid contents and does not include the bottle or packaging. On avg for further reference there are roughy 590 drops to a fluid oz using the avg dropper