What does it cost to make a bar of soap?
Less than people think for the ingredients and more than they think once their time is in. The classic 1,000 g batch — olive, coconut, palm, castor, 3% fragrance — costs about 11.54 in ingredients at ordinary bulk prices: 6.70 of oils, 1.44 of lye, 2.40 of fragrance and a dollar of color. Cut into ten bars with a 0.35 label and wrap each, that is 1.50 a bar in materials. Add ninety minutes of hands-on work at $20 an hour (3.00 a bar) and $5 of overhead (0.50 a bar) and the full cost is 5.00. That last number is the one to price from. The first one is why so many makers price at $5 and wonder where the money went.
Fees of 9.5% plus $0.25 take 1.01; net 6.99; minus the full cost of 5.00 leaves 1.99 profit per bar, a 25% margin — after you have been paid for your time. Break-even is 5.81. Ignore labor and overhead and the same bar looks like 5.49 profit, which is the number that makes $5 bars seem fine.
How to price handmade soap
The old craft rule is wholesale = 2 × cost, retail = 2 × wholesale. It works if "cost" is the full cost with labor in it: from 5.00, wholesale 10.01 and retail 20.02 — which is, not by accident, where handmade soap sits in most US markets. Applied to ingredients alone it gives retail 6.02, a price that pays you nothing for the work. The rule is a floor, not a target; the ceiling is what your market bears, and the gap between them is your actual business.
| Price | Fees | Profit per bar | Margin | Bars to cover a $75 table |
|---|---|---|---|---|
| $5.00 | $0.73 | −$0.73 | -15% | — |
| $6.00 | $0.82 | $0.18 | 3% | 426 |
| $7.00 | $0.92 | $1.08 | 15% | 70 |
| $8.00 | $1.01 | $1.99 | 25% | 38 |
| $9.00 | $1.11 | $2.89 | 32% | 26 |
| $10.00 | $1.20 | $3.80 | 38% | 20 |
| $12.00 | $1.39 | $5.61 | 47% | 14 |
Full cost 5.00 per bar from the example; fees 9.5% + $0.25. Computed by this site's engine. Below 5.81 every bar sold loses money once your time is counted.
Craft fairs: the number that matters
A fair has a fixed cost — the table fee, parking, the day — and every bar sold contributes its profit toward it. At 1.99 profit a bar, a $75 table needs 38 bars before you have earned a cent beyond your wage; a $200 juried show needs 101. Enter the fee in the tool and it prints the count. If the count is more than you have ever sold at a fair, the fair is marketing, not sales — which can be fine, as long as you decided it on purpose.
The ingredient-only cost per bar is the number that makes hobby soap feel profitable and keeps small soap businesses broke. Ninety minutes of making, cutting, curing-rack shuffling, wrapping, labeling and listing is the real input. Pick any rate — minimum wage, what a part-time job pays you, $25 — and put it in; a price that does not clear it is a subsidy to the customer, and you should at least know the size of it.
Where the numbers come from
Ingredient costs come straight from your recipe: the recipe builder multiplies each oil's grams by your price per kilo and does the same for lye and fragrance. Bars per batch comes from the mold calculator. Packaging is per bar (a label, a band, a box). Overhead is the fuzzy one: a share of electricity, the stick blender you replace yearly, product liability insurance divided across the year's batches, test batches that didn't sell. Five dollars a batch is a placeholder, not an answer — a year of receipts divided by a year of batches is.