Yes: unscented incense blanks cost pennies a stick, and fragrance oil is the main cost. Sold direct, a pack keeps more than half its price; to shops, about a third, made up by batch dipping, which cuts the time. Cones keep a good margin; holders, bought in and resold, a fair one. Margin = (price − cost) ÷ price. In the example below, a pack of 20 hand-dipped sticks costs $3.30 to make and sell direct and goes for $8.00, a 58.8% margin. A month of four products brings $7,410 of sales and about $3,550 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.
- A pack of 20 sticks direct: $3.30, $8.00, 58.8%.
- Fragrance oil is the biggest cost; blanks are pennies.
- Batch dipping cuts the time for shop orders.
- Holders are bought in and resold.
- TaroStack costs each pack from what each batch used. More below.
A pack, costed
Blue Ridge Smoke Incense, the made-up incense maker in Asheville, North Carolina, I use in these examples, dips sticks and makes cones by hand:
| A pack of 20 hand-dipped sticks, direct | Cost |
|---|---|
| Blanks and fragrance oil | $2.00 |
| Sleeve and label | $0.55 |
| Dipping and drying | $0.51 |
| Card fees, 3% of $8.00 | $0.24 |
| Cost | $3.30 |
The year is in incense business plan, and margin against markup in markup vs margin.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Incense sticks, pack of 20 | Direct, markets and online | $8.00 | $3.30 | $4.70 | 58.8% |
| Incense sticks, pack of 20 | Shops, wholesale | $4.25 | $2.87 | $1.38 | 32.5% |
| Incense cones, box of 12 | Direct | $10.00 | $4.87 | $5.13 | 51.3% |
| Ceramic holder | Direct | $12.00 | $5.22 | $6.78 | 56.5% |
The shop pack keeps 32.5%, batch-dipped; the cones keep 51.3%; the holder keeps 56.5%, most of its cost the holder itself.
A month's numbers
A month for Blue Ridge Smoke Incense:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Incense sticks, pack of 20, direct | 300 | $2,400 | $1,410 |
| Incense sticks, pack of 20, shops | 600 | $2,550 | $828 |
| Incense cones, box of 12, direct | 150 | $1,500 | $770 |
| Ceramic holder, direct | 80 | $960 | $542 |
| Month | $7,410 | $3,550 |
Shops bring the most sales; direct packs the most gross profit per pack. Batch dipping, a hundred sticks at a time in a long tray, is what makes the shop price work. Gross margin itself is in gross margin formula.
Get the calculator
Download the incense 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 oil price. A fragrance that costs three times the others, sticks that dry unevenly in humid weather, and a shop that reorders by the case change the month.
How TaroStack does it
TaroStack keeps blanks, oils and sleeves counted, and costs every batch.
Supplies in their units. Blanks bought by the thousand are used by the stick, and oils by the gram.
Designs as recipes. Each pack 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 |
| Sticks that dried badly | 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.