For many small business owners, the creative aspects of running your own business come easy. If you’re a soapmaker, choosing the ingredients, design, color and fragrance of products is fun! But after your products are created, it’s time to sell. This is when small business owners must decide how much to charge for the product, and that can be a little confusing. It’s important to understand there is no black and white guide to pricing your products. Every business owner will price their products differently depending on a number of factors, including the distribution model, fixed costs, raw materials, labor and more.
Before we dive into it, keep in mind these numbers are very simple and are meant to give you a place to start. In business, there are many small costs and things to consider that are unique to you. These numbers may also seem unrealistic for your situation; your costs may be much higher or lower. Adjust the numbers in the examples to fit your costs. For example, the overhead costs of a soap storefront in Seattle will be much higher than a soaper selling their products via Etsy. Click here to learn more about where to sell your products. To help make the process of tracking your costs a little easier, download this free Pricing Your Soap Worksheet.