How Much Does It Really Cost to Make Your Product?

It is really concerning if I ask a business owner what the cost is to make their product and they don’t know.

Sure, they may be able to give a “it’s about £xxx” type answer, but I know that’s a guess with very little solid backup to it.


But if you run a business and sell a physical product you need to know how much it actually costs to make.

Here’s a simple explanation of how to break it down.

1. List Everything You Use to Make the Product

That includes:

The materials or ingredients
The people helping make or assemble it (and what you pay them)
The packaging (boxes, labels, etc.)

2. Think About the Hidden Stuff

These are things that aren’t directly part of the product, but you still need them. For example:-

Your rent costs for your workspace or factory
Electricity, internet, and other utilities
Tools or machines you use

3. And Don’t Forget About Factoring In Things Like

Software or tools you use to run your business
Your own time (very often this is ignored!)
Delivery costs or storage

4. Do the Sums

Add up all those costs for the month, then divide by how many products you made.

That’s your cost per product.

Knowing this number helps you:-

✓ Set the right price
✓ Make sure you’re actually making a profit
✓ Spot areas where you can save money

You don’t need to be a finance expert, but please just start tracking what you spend. It’ll help you grow smarter and faster.