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The price on your quote is the biggest number in your budget, but it is not the whole budget. Labels, freight, shipping supplies and a few one time costs sit around it. Add them up before you order and you can set a selling price with confidence.
Two kinds of cost
The U.S. Small Business Administration suggests splitting what you spend into one time costs and monthly costs. The same idea works for a product launch: some costs come once, and some come with every order.
| Cost | When you pay | Notes |
|---|---|---|
| Product, per jar | Every order | From your quote. Ask what it includes |
| Label printing | Every order | Ask for the price at more than one quantity |
| Label application | Every order | If the manufacturer applies them |
| Freight to you | Every order | Depends on weight, distance and delivery type |
| Boxes, padding and tape | Every order you send out | Small, but it adds up |
| Postage to customers | Every order you send out | Decide who pays: you or the customer |
| Payment fees | Every sale | Check your provider's current rates |
| Label design | Once, plus changes | Your time counts even if you do it yourself |
| Barcode | Once per product version | Often needed for stores and marketplaces |
| Photos and a simple web page | Once | You can start small |
| Samples and giveaways | Each launch | Jars you will not sell |
| Permits and insurance | Varies | Depends on where and how you sell |
Landed cost: the number that matters
Landed cost is what one jar has cost you by the time it is in your hands and ready to sell.
Landed cost per jar = (product + labels + freight to you) ÷ jars you can sell
Divide by the jars you can sell, not the jars you ordered. The ones you keep for photos and samples still cost money.
A worked example
The brand and every number below are invented to show the math. They are not quotes, and they are not OSM prices.
| The batch | Amount |
|---|---|
| Product, 50 jars | $500 |
| Labels, printed and applied | $75 |
| Freight to the owner's home | $60 |
| Total for the batch | $635 |
| Jars kept for photos and samples | 5 |
| Jars to sell | 45 |
| Landed cost per jar to sell | $14.11 |
Now the owner tests a selling price of $35 with free shipping.
| Per jar sold | Amount |
|---|---|
| Selling price | $35.00 |
| Landed cost | $14.11 |
| Postage to the customer | $6.00 |
| Box and padding | $1.20 |
| Payment fee | $1.30 |
| Left over per jar | $12.39 |
The one time costs were $250 for label design and photos. At $12.39 left per jar, the owner needs to sell 21 jars to cover them. The other 24 jars are what the batch really earns.
If that is too thin, there are only a few levers. Raise the price, charge for shipping, lower a cost, or order a size where the cost per jar drops and you are sure you can sell them all.
Freight surprises
- Powder is heavy. Ask for a shipping estimate with your zip code before you approve the order.
- Delivery to a home can cost more than delivery to a business.
- Large orders may ship on a pallet. Ask whether the truck needs a loading dock or a liftgate.
- Ask if you can pick the order up yourself.
Barcodes
If you plan to sell in stores or on marketplaces, you will likely need a barcode. GS1 US is the organization that licenses them in the United States. It offers a single barcode option meant for small companies with only a few products, and it says each variation of a product needs its own barcode. Check its site for current fees.
Keep a cushion
Something will cost more than you planned. Set a part of your budget aside for it, and do not spend your last dollar on inventory.
Do not count a cost twice. If labels are already included in the product price, do not add them again.
Getting real numbers
Published launch prices for selected OSM white label products include a standard label allowance. You must supply a complete label for courtesy review. Printing requires a confirmed quote and written go-ahead. Shipping, tax and extras are separate. Other products and custom manufacturing are priced by quote. When you request a quote, ask for the full delivered cost and a clear list of what is included.
Common questions
Why does a small batch cost more per jar?
Setup work is spread over fewer jars. That is normal. Weigh it against the cost of jars you might not sell.
Should I count my own time?
Track it, even if you do not pay yourself yet. It tells you whether the product can grow.
What selling price should I use?
Start from your landed cost and from what similar products sell for. Then test it in the table above.
