Price Matters: What Should I Charge for My Soap?

Small Business
Price. It’s one of the most common questions we hear from business owners. Whether they are just starting out or evaluating their business. Depending on which you are the most typical questions are “What should I charge?” or “Am I charging the right price?” Here are our thoughts.

It Depends
We’d love to have a rock-solid answer that would be perfect in all situations. But we don’t. We do have a great working price, based on production costs and shipping with consideration given to packaging and marketing, but your final price depends a lot on where and how you’re selling.

Our working price is $4.99, which is great for a lot of situations. If you’re going to be on store shelves next to other soaps, or if you’re going to be at trade shows and farmers markets where you’re one of several soaps to choose from, this price will put you in a good, competitive position.

Price of SoapModern Soap Selling
These days, though, there are other venues to consider. Online sales are different than retail and in-person sales. Prices can vary widely, depending on whether you have your own online store or you’re featured in an online marketplace. Based on circumstances, costs, and business models, we’ve seen the same soaps sold online for prices ranging from $6.00 to $12.00.

We’ve also seen what might appear to be extreme pricing – $23.00 for a bar wrapped in paper and twine with an elegant, minimal logo. Elsewhere it would have sold much closer to the $6.00 to $12.00 range, but $23.00 was the price at a high-end boutique in Palm Springs, California. All other luxury soaps in the shop (organic becomes “luxury” in certain environments) were in the low-to-mid $20’s.

In that store, it was clear that the price was equated with quality. To undersell the other soaps in the store – the right thing to do in many other contexts– would have been a mistake. A lower one would have meant lower quality and discouraged buying.

Specials

There’s always discounting to keep in mind. There is a fine line between full-price and bargain basement prices (more on that below) but pricing items lower for a limited time can help move inventory and get people to try your product. We also like the idea of releasing a limited run product at a price to move. We just did that with our Pumpkin Spice bars.

Fine Points
General market behavior is one thing. There is also the wide-ranging organic and natural products world to consider, where quality is a bedrock, appearance can be highly important, and price can be part of appearance. If you’re on variety-store shelves with lots of other soaps, a price ending in “.99” makes perfect sense. If you’re in a natural food store, though, “.99″‘s  can be seen as shallow and manipulative, like corporate products and marketing. In these situations, round numbers – $5.00, $6.00 – will serve you much better.

10 thoughts on “Price Matters: What Should I Charge for My Soap?

  1. the soap market is flooded with soap vendors. so how can the soap companies that sell for private label help the little guy? It seems that the soap companies make their profits and have their set pricing. mean while the little guy is making crumbs on a bar of soap. the higher your price, turns more people away. I sell below the double the cost and have bars, foaming , shower gels, body wash, pet shampoo, horse shampoo,all natural cleaner. Giving up on vendor markets and farmer markets. looking to do on line business only . companies don’t care about you . bottom line there is a sucker born every minute.

  2. As a consumer, I never buy the soaps over $5.00. Just think about, how many soaps do I have to buy for the family of 4 for a month !! Always consider for the consumers is the best way to decide the price. I always think that way.

  3. This has some nuances that need to be considered … i.e. where the soap is being sold, etc. In some swanky places, a $5 bar of soap compared to a $20 bar may seem inferior to a buyer. That is not to say it is inferior – as it could be superior – but it’s all in the eyes of the beholder. So it is a good idea to consider where the soap is placed for sale. Good thoughts, so thank you.

  4. This is a very crappy post. Wasted my time reading it looking for good info, what about actually educating readers how to calculate their cost of production and pricing it right for their markets? Duh!

    • Is up to you to get educated about the cost/expenses, calculate profit, etc. That is if you are planning on having any type of business. Do your research don’t expect other people to do it for you.
      What you are reading are just suggestions.
      Educate yourself.

    • As an accountant, what I’ve done is add up all the cost of the ingredients in the batch I’m making then divide it by the number of bars that batch yields. Be sure to add your packaging costs as well. By packaging I mean EVERYTHING. The label, the decorative accents (if any) that you add and even your shipping boxes and postage costs if you offer free shipping. If you sell online, don’t forget to factor in the cost that the online marketplace (Etsy, Artsy, Boutsy, etc) take for commissions and credit card processing. (As an example, Etsy takes roughly 10% fees of the sale price + shipping cost) After you have your true cost in each bar, you can determine your appropriate mark-up. If selling online, Amazon is nearly impossible to complete with as a small biz. Etsy is pretty difficult to distinguish yourself on as well. Hope this helps a little 🙂

    • Lets make it simple. Cost of product (soap) add cost of packaging, labels and anything else you do to make your bar of soap ready to sell. Add all this together, take this cost times 2, now add the cost of shipping and divide this by the number of bars of soap you have- this will give you your wholesale price. Take this price and times that by 2 again and this is your retail price.

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