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Hot sauce making
All Containers›Shop by use case›Hot sauce making›Tools and directories›Price and margin calculatorShop all hot sauce and chili →
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Price and margin calculator

By Dwight Davis, Founder

Updated

On this page4
Work from cost up, then check the number survives every channel you intend to sell through. Pricing from a competitor's shelf is how margin disappears.

Build the cost first

Per bottle, ingredients: peppers, vinegar, salt, other, divided by measured yield rather than recipe yield.

Per bottle, packaging: bottle, cap, liner, orifice reducer, shrink band, label, share of the case.

Per batch, divided by bottles: kitchen rental, utilities, lab testing amortized, and your own time at a real hourly rate.

Per year, divided by bottles: process filings, insurance, licenses, equipment depreciation.

Then work the channels

Direct, market or your own site
You keep the full price and pay in hours.
Where most small producers actually make their margin.
Wholesale to a shop
They expect about half of shelf. Your cost must work at that half.
Which means shelf price is cost times four, not times two. A price set at a market usually does not survive this.
Through a distributor
Another cut beneath the retailer's.
Work backwards from shelf price. If the result is under your cost plus a real margin, you are not ready for the channel.
Online, shipped
Add packaging and freight before setting the price.
Freight on a single glass bottle is often a large fraction of its price and sometimes exceeds it.

What is missing from most calculations

Your own labor, which makes an unviable business look viable. Free samples, which at a festival are a meaningful share of a batch. Breakage and spoilage. Cases given away to win a listing. And the bottles lost to a crooked label or a cross-threaded cap.

Price at the top of what you can defend and discount deliberately. Starting low and climbing is the harder direction, particularly with wholesale accounts who have built their own shelf price on yours.

References

No published source. This page is written from practice rather than from published guidance. No extension service or agency publishes on this question for hot sauce, so nothing here is cited, and it should be weighed as experience and not as a standard.
Written from published extension guidance and federal publications, not from a laboratory. Your state's requirements and your own process govern anything general said here.