You’re probably not running a charity. If you’re a beauty enthusiast who has a passion for mixing up your own makeup formulas, take the next step: get paid. You can turn your hobby into a side hustle or even a full-time career by selling your creations online. Here’s how to price your cosmetic products so that you can keep doing what you love.
There are a variety of formulas online that you can try. Once you have all the numbers you need on hand, you can plug them into different formulas and compare those numbers with your competition’s pricing. Here’s one place to start:
(Base Production Cost x Markup)
+ Seller Fees
= Product price
This number is what it costs to make a single product. Make a list of your lip gloss making supplies, labels, packaging, postage, tools, surgical gloves—whatever you have to buy for each product. Include the taxes on the materials and shipping. Then determine how much of that material you use for one product. That is your material cost per item. You can find templates online that will help you track inventory and costs per unit.
This number is up to your discretion, but you can try between 2 and 4. After you’ve finished calculating and researching the competition, you can tweak this.
How much do you want to make per hour? You can play with this number as you get more successful, but consider starting around $10 an hour. If it takes you half an hour to make each product, add $5 to your formula.
There are benefits to using your kitchen as your laboratory, but you’ll still have some overhead costs, including:
- Advertising on social media, Google Ads, etc.
- Printing business cards and promotional materials
Websites such as Etsy or Shopify charge for hosting your product. Some marketplaces take a percentage of your profits as well. Don’t forget Paypal fees.
A final note: Many small businesses offer free shipping because it appeals to so many customers. If you plan to use that tactic, make sure you build those shipping costs somewhere into the formula.
Don’t undervalue your product to build your customer base. It’s not sustainable, and they won’t appreciate price increases. You’re running a business, not a hobby. Learning how to price your cosmetic products is about valuing yourself and your work. If you set your prices too low, buyers won’t think they’re worth more. Do your research on your competitors’ pricing to make sure yours stacks up.
Your products are handcrafted, which is one of your unique selling points. Don’t worry about sellers who are mass-producing their wares. Review your pricing every few months to find the sweet spot that your customers will respond to while still making enough to grow your business. You can depend on No Prob-Llama for supplies of the highest quality at the most reasonable prices. Here’s to your shiny financial future!