Price Calculator - Shay and Company Inc

Step One Product Information

Product Name * This can be a single product (i.e. "Lotion (Lavender)"), a product category (i.e. "Soap"), or even the average of all products. If you are going to save this calculation, use a unique name so you can easily identify it later.

Quantity Per Batch *

The amount of product produced in one batch. Don't count damaged product.

Item Type*

If you are doing these calculations to determine a profitable sale price, don't count any products given away, kept for personal use or set aside as a retain sample. Only count the number of products that are actually going to be (or were) sold in the batch.

Step Two Raw Materials

Enter everything that is used in the batch, including raw materials, fragrance, colorants, and additives. Also list the container and lid (if any), label and packaging matieral and label printing costs. Finally, include anything that is used up during production such as pipettes, gloves, masks, other disposable supplies, and cleaning materials necessary for cleaning up after the batch is complete.

Remove Selected Add Raw Material

	Item & (Supplier)	Amount Purchased	Amount Used	Cost \| Shipping	Batch Cost
	Coconut Oil (Shay and Co.)	7 pounds	6 oz	$16.75 \| $10.48	$1.46
	Please enter at least one raw material in Step Two.

Update Totals

Total cost of materials for batch: $0.00
Allowance for loss:

%
Total cost of materials including loss: $0.00
Material cost per Unit$0.00

Step Three Direct Labor

For the most accurate results, break out the different actions involved in making the batch and assign an hourly wage that is commensurate with the task. Some things can be done by inexperienced (cheap) labor and some require more skill and thus would be paid at a higher rate.

Remove Selected Add Direct Labor

	Task	Minutes	Hourly Wage	Labor Cost
	Measure out ingredients	25	$12.50	$5.21
	Please enter at least one direct labor in Step Three.

Update Totals

Allowance for labor taxes and costs:

%
Total cost of direct labor for batch: $0.00
Direct labor cost per Unit: $0.00

Step Four Fixed Overhead

Enter fixed overhead costs. The most common items are listed, but you may have other fixed costs. Don't include variable costs that change based on how and what you are selling (such as show fees). or administrative costs. If you currently work out of your home, include rent and utilities either as a percentage of what you are currently paying or as an estimate of what you would pay if you rented a suitable space to make and/or sell your products. Not accounting for your overhead costs now, when you are pricing your products, may result in unrealistic product prices later when your business expands and your overhead increases.

Total number of all products for month

The Total number of all products you expect to produce in one month. The fixed overhead amounts are divided up amongst all of the products, adding a little bit of cost to each one.In that way, the overhead costs are accounted for in your product cost and your the final retail price of your product.

Remove Selected Add Fixed Overhead

Item	Amount	Monthly Cost
Rent	* $	$0.00
Utilities	* $	$0.00
Business Insurance	* $	$0.00
Website Hosting	* $	$0.00
Website Domain	* $	$0.00
Business Registration/License	* $	$0.00
Please enter at least one fixed overhead cost in Step Three.

Update Totals

Total monthly overhead cost: $0.00
Fixed overhead cost per Batch: $0.00
Fixed overhead cost per Unit: $0.00

Total Cost per Unit: $0.00

Step Five Product Sale Price

Product Markup *

The Product Markup the difference between the wholesale price and the product cost. It is added to the cost of the product in order to cover the costs of doing business and create a profit. Normally the Markup is created by multiplying the product cost by a specific amount. Typically that the markup is at least 2 times the product cost. In a handcrafted soap or cosmetic business, a markup of at least 2.5 times the product cost is recommended in order to ensure long term viability for your business. However, there is no rule that says it can't be more; luxe or high end products may have a product markup of 3 or even 4 times the product cost.

Example: The cost of a product, including materials, labor and overhead, is $1.00. A product markup of 2.5 would put the wholesale sales price at $2.50 ($1.00 x 2.5). In a business, the $1.50 difference between the product cost and the wholesale price would be the gross profit that covers the expenses of running the business such as office supplies, promotion, administrative costs, travel, craft show fees, research and development, shipping, etc.

The cost + markup is the lowest price the product could be sold for and still cover all business costs with (hopefully) a small profit.

Adjust for Wholesale Reps 15% commission?*

If you use Wholesale Reps now, or plan to use them down the line, you should factor their 15% commission into your wholesale price.

Wholesale Markup *

Wholesale price per Unit: $0.00

Suggested Retail Price per Unit: $0.00

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