How to Cut Your Costs Without Cutting Quality
A Guide to Help You Turn More of Your Revenue Into Profit
- Sodium Bicarbonate - $1
- Citric Acid - $1
- Powdered Milk $1
- Coconut Oil - $0.40
- Fragrance Oil/Essential Oil - $0.55
- Coloring - $0.90
- Polysorbate 80 - $0.20
- Witch Hazel (for spraying, if you use it, you need the cost for it) - $0.10
- Packing (for 20 bombs) = $20
- Rent ($600 per month, divided by 30 = $20 per day, divide by 12 hours= $1.67 X 3 hours) - $5.01
- Electricity (if the monthly bill is $120) Total for 3 hours = $1.02
- Insurance ($275 a year, broke down to the hour) = $0.10
- Labor (Base labor on what you WANT to get paid, for the example $15 and hour. If you figure it for you as a base, when you're paying someone else less, you're making more profit, just by having someone else do it and cutting your labor costs) 3 hours @ $15 = $45
- First decide if you're just going to sell the products in your own shop or online store, directly to your customer. Or are you also going to wholesale them to other shops?
- Study the competition. Checkout where you're going to sell your items. Maybe it's an online marketplace like SoapSell Marketplace or Etsy. Don't stop there though, do Google searches, browse other companies websites. Takes some notes, and figure out the average price.
- Decide if you want to price average, above average or below average.