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If you ever thought of making and selling your soaps, You must read this article. We'll talk about how to correctly price your soaps.

Th

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

is is very important, as you need to know exactly how much a bar of soap costs you to make.

Pricing is extremely important for any busines

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

s to maximize profit. Why?

Simple.

If you price your soaps too low - you end up loosing money you should be making.

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

If you price your soaps too high - you loose customers and sales you should have made (because they buy from your competitor, where it's cheaper).

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

Do you see why correct pricing is so important? ;-)

So, let's begin.
All the numbers below are merely examples. Your numbe

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

s will be different:

1. FIXED COSTS:

All the costs you have before making one bar of soap, per month:

Rent: $150 (on

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

e room of your house is used for soap making)
Phone: $70
Water: $10
Electricity: $20
Insurance: $20
Equipment (pots, spoo

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ns, thermometers, moulds etc.): $30
(let's assume I spend $360 per year in equipment)

So, the total for fixed costs is : $300 per mon

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

th.

If you make 1,000 soap bars per month, your fixed cost per bar would be:

$300 / 1,000 = $0.3 per bar

2. RAW MATERIALS

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

Let's take a simple soap recipe to make things easier here:

Olive oil: $11 for 128 oz.
Coconut Oil: $14.01 for 128 ounces <

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

r> Palm oil: price $14.01 for 128 ounces
Lye: $4.50 for 16 ounces
Distilled water: $.99 for 128 ounce

So, the total raw materia

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

l costs for making
a batch of 96 bars is $44.51, or $0.46 per bar.

3. LABOR, LABELING & WRAPPING

Let's tally the labor, labelin

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

g and wrapping:

Labor: 1/2 per batch of 96 bars
(if you're skilled). At a cost of $15 per hour,
this comes to $7.5 per batch, or $0.0

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

7 per bar.

Labeling: (cost of paper, printer and ink - for small batches you can use your home computer and printer) - comes to about $0.

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

07 per bar

Wrapping - If you are skilled, you can wrap and label every soap bar in 1 minute of labor. This comes to $0.25 wrapping cost p

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

r bar.

4. LET'S SUM IT ALL UP:

Fixed costs per bar: $0.3
Raw materials per bar: $0.46
Labor per bar: $0

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

.07
Labeling per bar: $0.07
Wrapping per bar: $0.25

TOTAL COST: $1.15 PER BAR

So if you sell every bar fo

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

r $2-4, you make a nice profit.

Of course, if you want to use more expensive oils in your soaps, you will have bigger costs, but you can

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

also sell your soaps for larger profits.

Another thing to consider is that you can reduce your costs dramatically by ordering materials

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

in larger amounts, and making bigger batches. This can reduce your costs at %30 per bar! So please consider that after you make your first batches

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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