Knowing how much it costs to make an item is crucial when deciding on a selling price for that item. The Material Cost Calculator can help you keep track of what you spend to make each item so you can set a price that accounts for your expenses.
You can use the Material Cost Calculator with existing products or when adding a new product. Either way, the process is simple. Scroll down to the Additional Information section while editing a product and click the Calculate Cost link to get started.
Note: Your customers will not see any of the information you add to the Material Cost Calculator.
You’ll add all of the materials you use to make your product here. As an example, let’s say you’re selling fabric purses made with two kinds of fabric and a zipper.
The following fields need to be filled in for each material component. Remember - these are the materials you use to make just one of your items:
Material - the name or title of the item.
Quantity - the amount of this material that is used in your finished product.
Purchase Unit - the way you measure and buy the material (for example, by length or by weight). This can help you keep track of how you buy your materials.
Unit Cost - the amount you pay per Purchase Unit, regardless of how many are used in your finished product. For example, if you pay $12.00 a yard for fabric and use 2 yards making a purse, you would enter 12.00 here.
You can also include a link to where you purchased the item, but this field is optional.
Click Add Material to enter information for another material, or click the “. . .” link to duplicate one you’ve already added. You’ll see the total material cost update to reflect your changes. Once you’ve finished, click Save Product Cost to return to the edit product screen, then click Save once again when you’re finished editing your product.
If you’re using the Pricing Wizard to set a price for your product, you can enter the total material cost there to get the most accurate suggested selling price. You can also export the material cost information for any product using the Download CSV button in the Material Cost Calculator.