Remember the first part of the equation from yesterday?

materials + labor + overhead = “break-even” cost

Today, let me break down for you the cost of the materials I use.

Many of the materials I buy are on sale or I am able to use a coupon from sales flyers to purchase them. However, because I may not always be able to take advantage of such deals when purchasing materials for my SnugasaBugBaby products, I calculate my cost based on the regular price. I do not, on the other hand, calculate the time I spend shopping for materials as labor toward any particular product. I guess I figure the money I save on sales and with coupons can count as compensation for the hours I spend standing in line at the cutting table. Maybe I am cheating you. Maybe I am cheating myself. Maybe it will come out in the wash?

I do not sacrifice quality to save a few dollars in material costs. I buy high quality fabrics. The fabrics I use for my diaper bags and most of my playmat purses are home interiors fabric which are stable and durable enough that I feel very confident in using them as the exterior of a bag. The fabric which I used for my Original Blue Damask Playmat Purse is actually a designer fabric which runs $29.99 per yard. I think it is beautiful. This is the fabric I picked out to make my own playmat purse, diaper bag, and baby carrier sling before SnugasaBugBaby had really even crossed my mind. Although I am a frugal mom, I felt it was worth the expense to purchase this high quality fabric. I consider this a “Premium” Playmat Purse and it is priced higher than the other Playmat Purses which I have made.

The only fabric I have used which is a regular cotton print is the one for the Sugar Plum Fairies Playmat Purse. It costs 8.99 per yard. When you add in the cost of the interfacing (which isn’t necessary with the sturdier fabrics), it runs just over $10 (the same as the cost of most of the other fabrics I use). The bubble dots (minky) fabric is 12.99 per yard. It is wonderful fabric: very soft, very playful. It is not cheap.

The fabrics I use for my diaper bags and other Playmat Purses have a durable and stable feel almost like that of canvas.

Here is the break-down of the cost of materials for each of my products:

Playmat Purse

fabric 9.99
minky 12.99
clasps 0.83
fleece 0.84
TOTAL 24.65
plus tax 26.38

Premium

Playmat Purse

fabric 29.99
minky 12.99
clasps 0.83
fleece 0.84
TOTAL 44.65
plus tax 47.78

Diaper Bag

fabrics (2 yds) 19.98
lining 1 8.99
lining 2 2.24
fleece 4.50
clasps 1.66
velcro 1.50
board 0.30
key clip 2.00
TOTAL 41.15
plus tax 44.03

Peek-A-Boo Blankie

fabric 0.92
minky 1.62
ribbon 1.50
TOTAL 3.12
plus tax 3.34

Pacifier Strap

ribbon 0.58
clip 2.00
TOTAL 2.00
plus tax 2.13

You may notice (and if you did not, let me point out) that I did not include any cost for thread, stabilizer, buttonhole cording, or the small piece of velcro used for the pacifier straps and the fastener on the Peek-a-Boo Blankies. The cost of these things is difficult to calculate and relatively small for each individual item. Still there IS a cost to it, which I have chosen to count as a part of my overhead expenses (which we will cover in two days).

-:-

Follow the Whole Pricing Process:

General Pricing Formula

Calculating Break-Even Cost: Materials (You Are Here)

Calculating Break-Even Cost: Labor

Calculating Break-Even Cost: Overhead

Adding a Profit Margin

Adding Retail Mark-Up ?

Adding in Fees: Establishing the Final Price

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