Calculating Cosmetic Formula Costs
Deciding on the use level of raw materials in a cosmetic formula is an important aspect of formulation. However, product performance is only one factor that you should consider when formulating. Additionally, you have to consider the cost of a formula. But before you can consider the cost, you have to be able to figure out how to determine the final cost. In this short post we’ll show you how.
Step 1 - Start with a formula
We are going to assume that you already have created a formula. Use this cosmetic formulation spreadsheet. The key is that when you make your formula you have to know what % of the ingredient is in your formula. This means you have to equalize your formulas by weight. For example, if you are following a formula like this that calls for cups, teaspoons, and tablespoons of ingredients, you have to convert those units to % weight. The best way is to weigh all your ingredients and determine the number of GRAMS that you are using. Once all the ingredients are in terms of grams, you can figure out what % in the formula they are. The cosmetic formulation spreadsheet does this for you automatically.
Step 2 - Get your raw material costs
To get your formulation costs, you need to know the costs of each of your raw materials. This is something you should be able to get from the supplier. Although if you work at a large company you might have to go to your Purchasing department because they will have the real prices that your company pays. All the costs should be in the same units. Since I formulated in America, we took all the costs in terms of Dollars per Pound. Most other places in the world you are going to use Cost per Kilogram. It doesn’t matter which you use as long as all the raw materials are consistently in the same units. Also, the final number that you get will be in the same units as the cost of the raw materials.
Step 3 - Multiply formula % and cost
Next, multiply the % of the ingredient by the cost and divide by 100. So, if your ingredient is in the formula at 20% and it costs $4 per pound, you multiply 20 * 4 / 100 = 0.80. The partial cost of that ingredient in the formula is $0.80. This is what I call the residual cost.
Step 4 - Add up the residual costs to get total formula cost
Then it is just a matter of adding up all the residual costs to find the final formula cost. Pretty easy (especially if you are using the cosmetic formulation spreadsheet).
There you have it. 4 steps to calculating the cost of your formulation. No complicated math required. If you have any questions, leave a comment below.
