In short
To cost a formula, multiply each material's share of the concentrate by its price per kilogram and add the results. Then multiply by the amount of concentrate in a bottle. The guide covers the method and the extras that catch people out. Below are problems with invented prices, so that you can practice before using real quotes.
What you will learn
- Calculate cost per kilogram of concentrate
- Calculate the fragrance cost per bottle
- Find which lines drive the cost
Before this lesson: Client Requirements and Scope
Worked problem, with invented prices
| Material | Share of concentrate | Price per kg | Contribution per kg |
|---|---|---|---|
| A | 40% | 30 | 12.00 |
| B | 30% | 80 | 24.00 |
| C | 25% | 60 | 15.00 |
| D | 4% | 500 | 20.00 |
| E | 1% | 2000 | 20.00 |
| Total | 100% | 91.00 |
In a 50 g bottle at 15% concentrate, there is 7.5 g of concentrate, costing 0.0075 × 91 = 0.68. Notice that D and E are 5% of the formula and about 44% of its cost. That is why you always look at contribution, and not just price or share.
Practical exercise: Cost one of your formulas
- Use one of your formulas with at least eight lines, or a library formula with quotes you obtain.
- Find a current price per kilogram for each, noting the supplier, pack size and date. Small packs cost far more.
- Calculate each contribution, then total them. Check that your shares add to 100%.
- Calculate the concentrate cost per bottle at your chosen dose.
- Rank the lines by contribution, and name the top three.
- Recalculate with prices at a larger pack size, if you can get them.
You have done this well if your total can be reworked by hand, each price has a date and source, and you can name what is driving the cost. Remember this is the fragrance only, excluding alcohol, packaging and everything else.
Knowledge check
Written and reviewed by the RUŌOD Lab team. This is general education, not legal, regulatory, medical or safety advice. Example dilutions and exercises are for learning, are not validated products, and have not been safety-assessed. Completing a lesson confers no qualification. How we check these lessons.