Teach Soap

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Linda
I know the voices in my head aren't real, but they sure have some great ideas!

I go through olive oil by the gallon and only use EOs. It's all about your audience. There are people who are willing to pay a bit more for certain qualities.

Personally, I've never found a fragrance oil that I like (granted, I've only smelled about a dozen, but most were BB's samples, and I'm sure high quality). Still, they all smell like ... dime store to me. This is no doubt a personal preference and no way disparaging people who use them or sell them.

For me, I know what I prefer, and I'm pretty sure I have the local demand for those things. The two certainly have to go together!

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Lesli Sagan
Avital's Apiaries
Like us: http://www.facebook.com/AvitalsApiaries

I do use olive oil in all my soaps ( Im Italian so I can't help it) but I've been lucky to find it locally for a good price . I use tallow in 60 % of my recipes also sorced locally.There is some good compitition here so Im not able to change my recipe -alot of my customers read lables before they buy (and it's a good thing).
I've done 3 consignments and only one of them has worked out , but that one Im very happy with.

There is actually a fairly simple formula to figure out your retail cost. The key is knowing exactly how much you have invested in each bar. That includes everything ingredients, time, rent, insurance, shipping costs, advertising, costs to go to shows, etc... Once you figure out how much you have in a bar you divide that amount by the inverse of the gross profit percentage you want to achieve.

For example you have a total cost of a bar of soap of 1.00 ( just for example sake ) and you want to achieve a 35% gross profit you would then divide 1.00 by .65 which will give you a total retail price of 1.5385 or 1.54 a bar. This may not seem like alot but you have to figure that it accounts for all possible expenses in the base cost of the bar.

Or you could simply use the formula that many food service places use which is simply cost of ingredients times 3.

Both formulas actually produce about the same amount of profit within a small range. The second formula simply makes several assumptions about expenses where the first one is more accurate but requires much more careful record keeping and takes much longer to figure out the base cost of the bar.

As for how to determine a good retail price for your area that is a much harder question as there are so many factors you have to consider. I find that using the formulas above my price is higher then some but lower then others. I simply stick to the price that works for me and allows me to make what I need to and I find that I am selling all the soap I want to make. You can't allow your competition to dictate your price after all you run your business not them.

For Wholesale pricing I simply take out the additional costs that I inccur when selling retail that I wouldn't have if I sold wholesale and lower my profit goal a bit and apply the first forumla to my base bar cost or multiple the cost of ingredients by 2.5.

If you find the results of these forumlas give you a lower price then you are selling at that's great keep selling at your current price and enjoy the additional profits. Hope this information is useful it is how I was taught in the businesses that I have run over the last 33 years and it seems to work pretty well for me.