how to calculate the price of your homemade soap

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Do you own a soap business or are you considering starting one? 

Are you unsure how much to charge for your homemade soap?

Figuring out just the right price to increase your profit potential is not as difficult as it might seem. I will walk you through what you need to know, and how to figure out the best price for your homemade soap.

And I even made you an easy-to-use calculator so you can just plug in your numbers and determine your perfect price!

What is the average price of handmade soap?

Figuring out the average price of handmade soap is one of the best ways to feel out your competition. Often times you will see this price range from $5-15 per bar.

This price, of course, varies and depends greatly on the total costs of the materials and labor involved. But for most homemade soap, I have seen prices range around the $5-8 range. 

If you currently own an Etsy Shop, you have probably already seen the price of your competition. 

But, if you haven’t yet opened an Etsy shop and want to get started, make sure to sign up through my referral link so you can get 40 free listings when you open your shop.

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And if you have ever been to a craft show, or have sold your product at a craft show, you will also get an idea on the typical price range as well. If you are fortunate to meet a friendly fellow soap maker, they may even tell you about which products, prices, or packaging works best for them. 

Comparing your product to that of your competition is a great way to dial in on the best price range, and preferred quality of product. And finding that perfect price can help you out perform your competitors.

The price of your soap doesn’t have to be set in stone either. The retail price you charge can be fluid where it varies from time to time. This way you can compensate for the inflations rates you may experience from material cost.

The other day, I interviewed a few soap makers I am friends with on Facebook. Marissa, from Soap SUDuction explained that she is able to find ways to cut down on the total costs of her products, without cutting quality. 

Marissa uses natural ingredients in her homemade soap, and she also creates her bars of soap in small batches. So, while she may be spending more time on labor, she does not sacrifice quality.  

If you are looking for other ways to cut down on business costs, you can join the Amazon Vine program to get free Products, in exchange for an honest review.

Because her handmade soap is always created in small batches using only natural ingredients that are cruelty-free, vegan, and eco-conscious you know her products are high quality. 

She can also use these characteristics and qualities to better market her products as well. So, keep this in mind when you are marketing your own.

You can learn more about Marissa’s story in my other post about how two soap owners run a successful business

Like Marissa, if you are wanting to cut down on the total cost when pricing your homemade soap, you will want to aim to get a lower price when buying your ingredients. 

Natural ingredients tend to be a bit more expensive, so finding a wholesale price will greatly reduce the basic overhead cost and allow you to earn more profits. 

You may also be able to offer more sales, or free shipping without always compromising your profits. 

If your sales are low, offering incentives is one of the quickest ways to boost your numbers.

Here’s a list of common ingredients for making soap that you can buy in bulk from Amazon.

Email Marketing for More Sales

Email Marketing is one of the most effective ways to bring in more sales, and also has one of the highest return on investment (ROI) of any marketing method. So if you want to increase your sales, you will need to add email marketing to your business.

ConvertKit is one of the best email marketing platforms available. It is affordable, easy to use, and looks great on your website. And, even if you don’t have a website, you can still create great-looking landing pages to collect more emails to add to your list.

I use Convertkit all over my blog, and I love the way it looks, I love just how easy it is to use, and I can even save myself time by scheduling emails ahead of time.

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And since I have the premium version, I can create email sequences that automatically send emails to my current list, but also to my new subscribers, so I don’t have to manually send every email.

Not only does the premium version of ConvertKit allow me to save hundreds of hours by automating emails, but because I can create sequences and schedule them whenever I choose, I can create an email campaign to share sales and discounts and retarget my audience to make more money.

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    According to Medium.com, the 4 best and most effective promotions include percentage-based (50% off), dollar-value discount ($10 off), buy one get one (BOGO), and bundled discounts (5 bars for $20).

    However, when you do run a promotion, you want to make sure that the price of your soap is never below the cost per unit. The cost per unit can be calculated as the cost of all materials and labor that goes into each bar of soap. 

    So even if you do decide to run a sale, try using the pricing calculator to help you figure out the minimum price you should charge. And don’t forget the cost of shipping either. 

    If you are interested in learning how to make money from home, you can learn more about the 21 best work from home jobs.

    Another great way to make money from home is to start a blog, and you can learn how to when you sign up for my Free 7-day email course.

    If you are interested in having more community support in your business, I also recommend joining my Facebook group, which is perfect for small business owners. 

    Join our Community

    If you are ready to be part of a supportive online community, come join our group filled with business owners who are growing their businesses by networking, collaborating, and learning new tips and tricks every day. In this group, you’ll learn how to increase your sales, bring in new leads, and take advantage of great opportunities to network with business owners in your niche. Click the button below to join today!

    This group has regular promotion days and is a supportive online community where you can interact with other business owners who will support you in your journey.

    And, together, this group works to help everyone grow and learn better strategies to improve sales, find new leads, and so much more!

    Increase Traffic to Your Website

    There is almost no way to compete anymore without going online. With the return on investment (ROI) that comes with online marketing, it’s important to make sure that you are giving yourself your best chance.

    Using platforms like Pinterest can be a great way to bring in traffic to your e-commerce store. You can boost your website traffic from Pinterest with these 14 tips, and you can also save tons of time creating pins for your Pinterest account using these 8 easy tricks.

    You can also learn more about how to really leverage Pinterest traffic from the course Pinteresting Strategies. I’ve found this course incredibly helpful for increasing my websites traffic.

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    How to calculate the cost of your ingredients

    Because there are different ingredients for each recipe, you will need to calculate the cost of each individual ingredient. This is actually fairly easy and doesn’t require much thinking. 

    To calculate each individual ingredient, start with the retail price you would have paid for the ingredient. For example, if you bought olive oil for $3.85 for a 12-ounce bottle, you will need to divide the total cost by the number of ounces ($3.85/12 = 0.32). This number gives you the price per ounce for that ingredient. 

    This comes out to about 32 cents per ounce. 

    If you calculate your recipes in different values like milliliters, you use the same formula of price/volume = cost per unit. 

    Now if you buy different ingredients on sale, don’t consider the sale price. Stick with the retail price. If you decide to offer a discount later on your bars including this ingredient, you won’t be losing out on as much profit. 

    This helps lower the total cost for you and helps to avoid inflation rates. 

    Now when you are ready to create a new batch of soap, you can calculate the different ingredients on a cost-per-ounce basis. 

    If you decide to add essential oils, or other fragrances into your soaps, you can try and calculate the cost per drop. But this can get to be a bit tedious if you try and calculate the exact amount of drops you get out of a bottle of fragrance oils. 

    Instead, you can use this guideline. For every ounce, there are approximately 600 drops, and for every milliliter, there are about 20 drops. 

    So, say that I have a 4-ounce bottle of lavender essential oil (my absolute favorite smell!). And there are 600 drops per ounce which total to about 2400 drops per 4 ounces. This bottle cost me $16.59 at retail price. 

    So, the price per drop comes out to about ($16.59/2400 = 0.0069) or less than 1 cent per drop. But for the sake of easy math, we’ll say each drop is one cent. 

    If you want to include the cost of essential oils in your basic overhead costs you can. But you may also choose to just use an average price and estimate how much adding fragrance oils will cost per batch, and consequently, per bar. 

    How to calculate the price of your homemade soap

    Now that you know the cost of your ingredients, you can then calculate the cost of the bars of soap. And you finally get to use the awesome calculator I keep mentioning!

    Now calculate the total cost of all your ingredients. Take a look at your recipe and write down the cost per unit for each of the different ingredients. 

    Assuming you have calculated each ingredient (with or without your essential oils), multiply the cost per unit by the total of each ingredient.

    For example, the recipe calls for …

    11.5 oz …Olive Oil ($0.32/unit) 

    20.7 oz …Palm Oil ($0.58/unit)

    40 drops…Lavender Essential Oil (<$0.01/drop)

    Now let’s draw out the math!

    11.5×0.32 = 3.68

    20.7×0.58 = 12.01

    40×0.01= 0.40

    The total cost of this batch of soap will run at about $16.09. Since a typical bar of soap is around 3 ounces, this lot of soap will yield around 10-11 bars of soap. And after calculating the price per bar, these bars should cost around $1.46 per bar.

    You may choose to insert labor costs into your total cost. However, for most small businesses, you will be initially investing more time than money in the beginning. Especially if you choose to create small batches for higher-quality bars.

    As your business grows, however, and you begin to really get into the flow of things and develop your own process, you may want to start charging for your labor costs.

    Once all of your material costs have been figured out, you can then figure out the average price of shipping.

    This part will depend on your preferred shipping and packaging methods. 

    However, if you have shipped your products in the past, you can calculate the average price per bar this way as well (cost of shipping/bars of soap in package = average). 

    Soap costs will vary from one recipe to the next because you will be using different ingredients. But you want to aim to keep your prices close to the same range as possible. 

    Remembering that most bars of soap weigh around 3 ounces, you may want to occasionally weigh your bars after you cut them. This can give you a rough estimate of how thick to cut your bars. 

    Using a weighing method can help keep your price consistent.

    This High-Capacity Kitchen Scale is a great way to track the weight of your ingredients, and your finished product.



    The typical thickness that many soap makers use to cut their bars of soap is around 1-1.25 inches thick. But, depending on which type of mold you use, this may be a different number. 

    When creating small batches of soap, it’s pretty typical to use a rectangular silicone mold. But, for soap makers who make larger batches in bigger square molds may choose more square-shaped soap. 

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    How to make sure you always earn a profit

    Always making a profit as a small business owner can be difficult at times. But making sure you never sell below your basic overhead costs is key.

    However, you don’t want to mark up your product with a high price that potential customers can’t afford. But, you also don’t want a small profit that barely keeps your business afloat.

    Material Costs

    Figuring out your basic overhead costs of producing a single bar of soap is your first step. You can use the calculator to help you figure this out.

    If you are able to get some of your vegetable oils, essential oils/fragrance oils, and the other different ingredients required for your recipes at a wholesale price, this can greatly reduce your basic overhead costs. 

    Bulk Apothecary is a great site that offers tons of options for wholesale-priced soap ingredients. They offer tons of different sizes from 0.5 ounces to as much as 400 pounds for some ingredients! Which is kind of crazy if you ask me. 

    But this is a great way for you to save a few bucks with your cost of materials. However, if you’re just starting out you probably don’t have much profit to reinvest into your soap business. So, buying your ingredients in smaller quantities may be the better option starting off.

    Here’s a quick list of some common ingredients you can get from Amazon with a variety of sizes.

    Shipping Costs

    If you choose to offer free shipping, always make sure that you never take a big loss in profit. You may find a price point where the minimum bars of soap sold and shipped is about the same price as a larger shipment. Many companies will offer free shipping for orders over $49 or more, but you can determine your own price range on this as well. 

    If you decide to run a promotion for a holiday, or seasonal offer, this is a great chance to increase sales by offering free shipping. Something like 50% off shipping, or “only $2.99 for shipping if you order now!”. Just make sure the shipping costs do not reduce your profits to below your basic overhead costs.

    Promotions

    Offering frequent promotions will often bring in new potential customers. But, you should always be nurturing previous, loyal customers as well. 

    Using an email marketing service like Convertkit is a great way to remind your previous customers of upcoming sales. And, potential customers looking at your store’s website, may want to buy your homemade soap but need some additional incentive.

    Email Marketing

    With an email marketing system like Convertkit, you can include pop-up forms on your home page or store page. These pop-ups are a great way for you to offer a discount on your homemade soap and can encourage those potential customers to buy. For example, “Take 15% off if you buy in the next 3 hours”.

    However! If you decide to add pop-ups to your site, do not allow them to pop up too soon. This can often repel your customers and shoo them off your site. This is the last thing you want.

    The gold rule, or general guide for when a pop-up should appear is between 5-30 seconds. This does not prevent the user from viewing your site before they’ve even had a chance to load the page.

    Another option is to take a look at your average user view time on your pages. Then, choose a time slightly higher than this.

    The price of your handmade soap should make you and your customers feel good. If you feel like you’re charging too little, but your customers complain that it is a high price, then you need to adjust. And, vice versa. 

    You won’t likely hear a customer complain about a low price, but you may more often hear compliments like “What a great price!”, or “What great value for the price!”. This will tell you that you may have the option to raise your prices just a little. (Not too much at once though)

    One other way to increase your potential sales is to include “abandoned cart” emails. If a potential customer has placed some items in their shopping cart, but hasn’t checked out within a certain time frame (like 24-48 hours for example), you can send them an abandoned cart email.

    Additionally, you can also offer them a discount on their cart as well to encourage them to buy. If you choose to provide discounts to abandoned carts, start small, and after certain time periods, begin to increase the discount. Remember, don’t offer discounts that cause you to lose profits (including shipping costs). 

    Etsy Shop

    If you haven’t already opened an Etsy shop, you can earn 40 free listings when you sign up through my referral link.

    For those of you who have an Etsy shop, you are probably well aware that you have a ton of competition. Figuring out how to get ahead of the competition can be incredibly difficult, especially starting out. 

    Using Etsy SEO is a great way to better target your audience in their search results. But, as a newer Etsy seller, you aren’t as likely to appear toward the top. So, making sure that you find the right keywords is, well, key.

    To find good keywords, start by describing what product you are selling. Then, type this into the Etsy shop search bar. Now, take a look at the top results.

    What words are they using? In which order are they placing the words? How high quality is their pictures? How many sales have they made, and what is their store rating?

    Once you can find similarities among your top results, you can use these clues to set up your own Etsy shop for better search results. 

    The same thing goes for when you are using Etsy ads. If you are running a discount on your products, using the same search method, you can do a pricing competition. You want to avoid having a high price compared to your competitors. 

    Many customers will filter their search results to rank the lowest price first. This is where you can take advantage of “working the competition”. 

    Craft Shows and Farmer’s Markets

    Craft shows and farmer’s markets are some great ways to sell a bunch of products in a day’s time. It’s also a great way to get your name out there, show off your brand, and more importantly, establish loyal customers. 

    When you create great products that your customers love and rave about, you want to make sure that you are able to keep them coming back time after time. To do this, make sure you have plenty of business cards on hand.

    You can easily create business cards on Canva with a free account. Canva offers tons of great customization tools to really help you build a well-branded business card. Just make sure you include at a minimum, your store name, your store’s website, or a link to wherever you sell your products. 

    At craft shows, farmer’s markets, and even flea markets, you want to make sure to try and stick to selling most of your products at their retail price. But, if you want to catch the eyes of potential customers, you may want to offer discounts on a few of your products.

    These can be your best sellers, overstocked products, or some small samplers. It’s also a great way to sell your products in bundles.

    Buy 3 get 1 free, or 5 for $20.

    Hopefully, you feel more confident about the price of your soap, have a better idea of how to increase your sales, or just have a few more ideas about growing your soap-making business. Good luck selling!

    What do you normally price your soaps at?

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