Article by: Perry Romanowski

Here is a short cosmetic science tutorial video we made that shows you exactly how to go about figuring out the costs of a cosmetic formulation.  If you find it helpful, you can use the following spreadsheet to do your costing.

Cosmetic Formula Costing Spreadsheet

 

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4 comments

  1. Mark Fuller

    I would be interested in seeing people who work in smaller operations such as mine expound upon this process. For example, how do you price out the batching and packaging? Do you maintain a database of costs and update it occasionally? Do you pass on costs incurred due to minimum order quantities?

    1. Marilyn

      Hi Mark, I have been a small producer for awhile. I figure my cost of ingredients as outlined in the video. I also keep track of the time it takes to handle the product and add that, then a flat average amount for the label/packaging, and then a percentage for overhead; like liability insurance, rent, utilities, equipment replacement etc. I then try to double that to get my wholesale price – and doubling that would be retail. Some things just won’t double but others can be more than doubled. And then there are things where the math just doesn’t work.

      A big challenge is not being able to buy large enough quantities of ingredients to get the great price breaks. Another is hobbyists who undersell their product which hurts the industry because they are not taking all their costs into account.

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