Home Cosmetic Science Talk Formulating General How much do you charge for your products

  • How much do you charge for your products

    Posted by Abdullah on March 9, 2021 at 4:59 pm

    My actual product costs %50 more than it’s package. Ex; if it costs me $2.5, $1.5 is Product and $1 is packaging cost.

    What is the ratio between your product and packaging cost and what is the industry normal for skin and hair care products?

    If my Product cost me $2/unit, i sell to wholesalers at $5, to retailers at $5.5 and to consumer at $10. 
    This $2 is actual product cost excluding labor and any extra costs.

    How much do you charge for your product and what is the industry normal?

    I am willing to change my prices if i am charging more or less than what companies normally charge. I charge so because the wholesalers were happy to take %10 profit and retailers were happy to take %100 profit.

    Abdullah replied 3 years, 3 months ago 3 Members · 4 Replies
  • 4 Replies
  • Benz3ne

    March 10, 2021 at 9:39 am

    You should be able to back-work it to some degree.
    If a shop sells a shampoo for $3 and you know from your discussions that the markup has to be e.g. 25% then you know it’s been sold to the shop for $2.40.
    If you’ve a rough idea of packaging, material, production & labour costs then you can approximate how much profit they’re making.
    Whether that profit aligns with what you’re happy with, or whether you’re making a profit at all, will help you govern your wholesale/trade price.

    What is obvious yet worth noting is that the more you produce the lower your costs will likely be.
    If you can buy 2x the packaging, or 10x, the price per unit typically drops quickly.
    Same goes for raw materials. Thereafter you’re either maximising profit or able to undercut competition.

  • Abdullah

    March 11, 2021 at 2:13 am

    @Benz3ne thanks

  • Sponge

    March 12, 2021 at 10:41 pm

    Makeup packaging is known to be expensive. I believe the industry standard is about 1:1 but I can see luxury packaging going upwards of 4:1, packaging:makeup.

  • Abdullah

    March 13, 2021 at 4:11 am

    @Sponge mine is 200ml Shampoo bottle and 80ml lotion tube

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