List every material in the product
Start with the ingredients and components used in one finished item or one batch. Use the quantity consumed, not the full purchase quantity.
If a bottle of fragrance oil is used across many batches, calculate the cost of the amount included in the recipe.
Include packaging and finishing materials
Jars, boxes, labels, tissue, inserts, and other packaging are part of the product cost. Small items are easy to miss, but they can make a meaningful difference across a larger batch.
Add labor and overhead thoughtfully
Material cost is only one part of making a product. Many makers also account for hands-on labor and a reasonable share of overhead such as studio costs, utilities, or equipment.
A simple product cost can include:
- Ingredients and components.
- Product and shipping packaging.
- Direct labor.
- A sensible share of overhead.
Keep costs connected to recipes
Recipe-based costing makes updates easier. When a material price changes, you can see which products use it and review their estimated costs without rebuilding a separate calculation.
Keeping those costs visible makes pricing decisions easier to explain and review.