Sea Salt Business Profit Margin, per Tin and per Month

A sea salt business sells something made from seawater, so its margin isn't about ingredients at all: it's fuel, hours and the tin. In the example below, a 4-ounce tin of flake salt takes about a gallon and a quarter of seawater, 80 cents of propane to evaporate it, $1.10 of tin and label, and $2 of hauling, filtering, tending the pans, harvesting and packing. Sold direct for $12, it earns 65%; to a shop for $7, 41%. Infused salts earn 67% and a pound for a restaurant 45%. Over a month, five products bring $11,300 of sales and $6,421 of gross profit, and about $5,350 is left after the fixed costs. Below is a tin costed, why time is the cost, the margins by channel, a month's numbers, and where the margin leaks.

The short version

• Cost a tin from the seawater: the fuel to evaporate it, the hours, the tin and label, the fees.
• Seawater is about 3.5% salt, so a 4-ounce tin takes about a gallon and a quarter after losses.
• The hours are the biggest cost; the salt itself is almost free.
• Direct tins earn about 65% in the example; shops 41%; restaurants 45%.
• Infused salts and gift sets earn more on a few cents of herbs or smoke.
• Test your water and your salt; the margin is no use if a batch can't be sold.
• TaroStack records every batch's yield and keeps the tins counted. More below.

A tin, costed

Kachemak Sea Salt Co., a made-up sea salt maker in Homer, Alaska, I use in these examples, hauls and filters seawater, boils it down with propane, and finishes the flakes in shallow pans.

Seawater is about 3.5% salt by weight, so a gallon holds nearly 5 ounces in theory; after the fine salt that doesn't form flakes and what's lost in the pans, about 3.4 ounces of flakes come out of each gallon here. How a batch's yield turns into cost is in batch yield formula.

The hours are the cost

Evaporating seawater is slow. A batch needs hauling the water, letting the sediment settle, filtering, boiling it down, then hours of low heat while the flakes form, harvesting them, drying and packing. Spread over the tins, that's $2 a tin, more than the fuel and the tin together. A solar greenhouse or a bigger pan cuts the fuel; only bigger batches cut the time.

Margins by channel

The shop tin carries 20 cents of delivery. The smoked and herb salts use a few cents of alder smoke or dried herbs and sell for more than the plain flakes. A restaurant pound is mostly time, $8 of its $12. Selling at markets has its own costs, set out in cost to sell at a farmers market.

A month's numbers

Fixed costs are $1,075 a month: the salt house ($500), licenses ($40), insurance ($70), the website ($40), market fees ($150), ads ($200), water and salt testing ($40) and software ($35). That leaves about $5,350 a month, a 47% net margin, with every hour paid at $20. The month makes about 280 pounds of salt from about 1,300 gallons of seawater.

What a good sea salt margin is

With labor counted, 60% or more direct and 40% or more to shops leaves room for the batches that don't flake well and the slow winter months. Margins in food in general are in good profit margin for a food product.

Where the margin leaks

Fine salt. Salt that crystallizes fine instead of in flakes sells for less; use it for brines, rubs or bulk.

Bad water. Seawater collected near a harbor, a stream mouth or after heavy rain can carry things you can't sell. Test the water and the finished salt with a lab, and keep the results with each batch.

Breakage and moisture. Flake salt crushes in shipping and clumps in damp air; pack it in tins or rigid jars.

Slow months. Markets fall off in winter; the gift trio and online shop carry the slow season.

Get the calculator

Download the sea salt profit margin calculator. One line for each product and where it's sold: the price, the fuel and any herbs or smoke, packaging, labor and fees as a share of the price; the cost, gross profit, margin, markup and the price a 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 sheet uses one yield and one fuel price. In practice each batch gives a different weight of flakes, propane prices move, and tins, jars and gift boxes are bought in different quantities.

How TaroStack does it

TaroStack records every batch's yield and keeps the tins counted.

Every batch recorded. Each batch records how much salt came out, flake and fine, good and rejected, so the yield and the real cost of a pound show, and a batch record form carries your own fields, such as the water test, with limits and a sign-off.

Tins counted. Tins, jars and gift boxes are counted by the each and come up on a reorder list in days of cover; filling tins takes them off stock.

Margins by customer. Each shop's and restaurant's order is a sales order, and margins are reported by product and by customer.

Batches, batch records, reorder lists and margins 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.

Questions people also ask

Is a sea salt business profitable?

It can be. In the example, $11,300 of monthly sales leave about $5,350 after fixed costs, with every hour paid at $20.

What is the profit margin on sea salt?

In the example, 65% on a 4-ounce tin sold direct, 41% to shops, 67% on infused salts and 45% on a pound for a restaurant, with labor counted.

How much seawater does it take to make salt?

Seawater is about 3.5% salt, so a gallon holds nearly 5 ounces; the example gets about 3.4 ounces of flakes a gallon after losses.

What costs the most in making sea salt?

The time: hauling, filtering, tending and harvesting come to $2 a tin in the example, more than the fuel and the tin together.