Working out what to charge

Two cost lines here that makers often leave out, and both of them recur.

Cost per bottle

Bottle, closure, label, carton share.

Ingredients at cost per liter times fill volume.

Labor at your rate divided by finished bottles per hour.

Then the two this category adds: cold storage, allocated per bottle per week of expected stock holding, and delivery, which for a chilled product is a refrigerated round rather than a courier label.

And testing, amortized: alcohol testing and nutrition analysis spread across the production run.

Worked example

A 330 ml bottle. Bottle 0.30, crown 0.03, label 0.07, carton share 0.06: packaging 0.46.

Ingredients at 0.80 a liter, so 0.26.

Finishing 120 bottles an hour at 25 an hour: 0.21.

Cold and delivery, say 0.15.

Unit cost about 1.08, plus overhead and testing, call it 1.35.

Note the shape: packaging is more than the contents, which is the pattern across this whole estate, and cold plus delivery is as much as the labor.

From cost to price

Set wholesale first with a real margin, then double for retail, then check against the chilled cabinet the product will sit in.

If retail lands above the band, the answer is a cheaper package or a different format rather than a thinner margin.

The sanity check

A real week: hours worked, bottles finished and delivered, margin per bottle.

If the week's margin is not a week's pay, the levers are format, freight and channel.

And run it again including the cold storage bill, which is the line that quietly makes a local product unprofitable at distance.

References