Here is a typical shampoo formula. It’s pretty basic and features sulfates, betaine, standard preservatives, and a fragrance.
Whenever you are creating a formula, you should make a sheet like this. Some companies offer special software to do it, but I’ve found using a spreadsheet is simple. Included in the sheet should be… (click to enlarge)
1. Ingredient name
2. % in formula
3. Cost of the ingredient
4. Calculated amount in formula batch
5. Calculated cost in formula
Cost in the formula
when you are trying to figure out a way to save money on a formula, you need to first figure out how much the formula costs you. The way to do this is to multiply the cost per pound (or KG) of the ingredient by the % of ingredient in the formula.
So, in this formula the fragrance costs $11 per pound and is used at 0.225% which means it contributes $0.0248 per pound of formula.
Not just the raw material cost
In this formula you can see that the most expensive raw materials include the dyes, the polysorbate 20, and the fragrance. However, these are used at low levels so they do not contribute the highest amount to the final cost of the formula. One of the least expensive ingredients is Sodium Lauryl Sulfate and it contributes the most to the cost because it’s used at a high level.
Finding cost savings
One simple way to reduce the cost is to water down the formula. So, suppose you wanted to save 10% on this formula. One simple way is to reduce all the ingredients by 10% and replace it with water.
For example… (click image to enlarge)
Note: When you do this, you shouldn’t reduce the level of preservative or color as that will not save you much money and you may have really detrimental effects on your formula.
What’s the harm?
Adding water is a simple way to create a reduced cost formula. There may be some downside as this formula could be unstable or perform differently in various tests. You absolutely must test to make sure the formula still meets your performance and aesthetic requirements. But you can often take a formula and add a little water (or other solvent) to save a significant amount of money.