Yes: salt is cheap, and a jar of bath salts is mostly salt. The essential oil and dried flowers cost more than the salt, and the jar costs more than everything in it. Mixing is quick. Sold retail, a jar keeps three-quarters of its price; to gift shops at half of retail, still more than half. Margin = (price − cost) ÷ price. In the example below, an 8-ounce jar costs $2.96 to make and sell and goes for $12.00, a 75.3% margin. A month of four ways of selling brings $5,240 of sales and about $3,570 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- An 8-ounce jar retail: $2.96, $12.00, 75.3%.
- Salt is cheap; the jar costs more than what's in it.
- Refill pouches keep the most: no jar.
- Gift shops at half of retail still leave more than half.
- TaroStack costs each jar from what each batch used. More below.
A jar, costed
Salt Marsh Soap Co., the made-up soap maker in Charleston, South Carolina, I use in these examples, mixes a lavender and sea salt bath soak alongside its soap:
| An 8-ounce jar of bath salts, retail | Cost |
|---|---|
| Epsom and sea salt, essential oil, dried flowers | $1.00 |
| Jar, lid and label | $1.10 |
| Mixing and filling | $0.50 |
| Card fees, 3% of $12.00 | $0.36 |
| Cost | $2.96 |
The soap side's margins are in soap business profit margin, and what goes on the jar in cosmetic labeling requirements.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Bath salts, 8 oz jar | Markets and online | $12.00 | $2.96 | $9.04 | 75.3% |
| Bath salts, 8 oz jar | Gift shops, wholesale | $6.00 | $2.60 | $3.40 | 56.7% |
| Refill pouch, 16 oz | Online | $14.00 | $3.17 | $10.83 | 77.4% |
| Sampler, three test tubes | Markets | $10.00 | $3.20 | $6.80 | 68% |
The wholesale jar keeps 56.7%; the refill pouch 77.4%, with no jar to pay for; the sampler 68%, most of it in the tubes.
A month's numbers
A month for Salt Marsh Soap Co.'s bath salts:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Bath salts, 8 oz jar, markets and online | 150 | $1,800 | $1,356 |
| Bath salts, 8 oz jar, gift shops | 300 | $1,800 | $1,020 |
| Refill pouch, 16 oz, online | 60 | $840 | $650 |
| Sampler, three test tubes, markets | 80 | $800 | $544 |
| Month | $5,240 | $3,570 |
Gift shops bring the most sales; the refill pouch keeps the most of each dollar, sold to customers who already have the jar. A bath soak sold as a bath product is a cosmetic; one that claims to soothe sore muscles starts sounding like a drug, so the label sticks to what it is. Bath bombs, its fizzy cousin, are in bath bomb business plan.
Get the calculator
Download the bath salts margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one essential oil price. Lavender oil that doubles after a short harvest, jars that went up a dime, and a gift shop that orders twice as much change the month.
How TaroStack does it
TaroStack keeps salts, oils and jars counted, and costs every batch.
Supplies in their units. Salt bought by the 50-pound bag is used by the ounce, oils by the gram, and jars by the each.
Designs as recipes. Each soak is a recipe of its supplies, so a batch takes them off stock and is costed from what they cost, and good and rejected pieces are recorded.
Reordering. Supplies come up on a reorder list in days of cover, worked out from how fast they're used.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Supplies on hand | Count the shelf | Stock in its own units |
| What a batch cost | Prices you type | Costed from what you paid |
| Jars that cracked | Not counted | Good and rejected on each batch |
| When to reorder | When it's low | Reorder list in days of cover |
Recipes, units, costing and reorder lists are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.