inventory management

Soapmakers: Why You Need to Track Your Inventory

In this blog post, we will discuss the importance of inventory tracking for soapmakers and provide some tips on how to get started.

As a soapmaker, it’s important to track your inventory so that you can always be aware of what you have on hand and what needs to be ordered. This includes both your raw materials and your finished products. Not only does this help you stay organized in general, but it has a huge number of other benefits that will allow your soapmaker business to thrive.

In this blog post, we’ll discuss the reasons why you should be taking inventory management seriously if you make handmade soap products.

Keep up with demand and customer expectations

As a soapmaker, one of the most important things you can do is keep track of your material stock. This may seem like a no-brainer, but you’d be surprised how many soapmakers run into problems because they simply don’t know how much material they have on hand.

If you’re constantly running out of your raw materials, your production times can blow out significantly as you have to wait until your reorder arrives before you can make new batches of your soap. For Etsy sellers, missing your delivery targets can lead to losing your Star Seller rating and thus your visibility in search - this can be a Pretty Big Deal to a small handmade business.

On the other hand, if you have too much material stock due to purchasing materials that you already had enough of on hand, this can be a problem as well. You’ll have a lot of your money tied up in raw materials that are not making you money. For soapmakers, in particular, many of these raw materials have a shelf life: if you don’t make products before they expire this is money simply going down the drain. This is money you could have spent on growing your business in other ways, so over buying materials can definitely put the brakes on your efforts to grow.

Keep better control of your soap costs and pricing

Inventory tracking also allows you to keep better track of your material costs. This information can be helpful in pricing your products and making decisions about your business.

Soapmakers running successful handmade businesses are always trying to find ways to save money and increase profits, whilst ensuring they are not sacrificing the quality of their work. One easy way you can do this is by keeping better track of your raw material inventory.

By knowing the exact amounts of each raw material you use to create your soap products, you’ll be able to see how much it costs you to make your products at cost price. Cost price is the amount you can sell your soap products that cover your costs exactly, without making any profits.

Knowing your cost price means you can apply a margin to the top of this amount, meaning you know the exact profits you are taking from each product you sell.

This enables you to set prices that achieve the profit margins you need, rather than guessing a price based on your competitors (who may or may not be making money)

Guessing at prices may look like it works in the short term, but in the long run, it can lead to serious problems with inventory and cash flow. Not to mention, it can be difficult to attract customers if your prices are constantly changing.

By taking the time to calculate your costs and overhead, you can ensure that your prices are fair and consistent. This will help you to better manage your finances and keep your soapmaking business running smoothly.

Read more: 4 Pricing Mistakes Handmade Sellers Make »

Compliance with Good Manufacturing Practices

Soap making is not only an art, but a science. And like all good scientists, soap makers need to keep meticulous records of their work. This is especially important when it comes to keeping track of material stock.

Good manufacturing practices (GMP) require that all manufacturers maintain accurate records of the materials used in their products. This helps to ensure that products meet safety and quality standards. Soap makers need to be especially vigilant in this regard, as even small changes in the ingredients can have a big impact on the final product.

By keeping careful records of material stock and your soap batches created, soap makers can help to ensure that their products meet GMP standards and are safe for use.

Inventory management software for soapmakers

For soapmakers, choosing the right software for inventory management is essential. There are a few things to consider when making this decision. First, soapmakers need to decide what type of system they want to use.

Solutions for inventory tracking range from downloadable Excel spreadsheet templates to dedicated inventory management solutions. They each have their pros and cons - as every soapmaking business is different, it is important to take the time to evaluate what you really need to track and how much money you are prepared to spend on a solution.

Popular features in dedicated inventory software for soapmakers include low stock limits and other inventory alerts, expense tracking, qr code / barcode scanning, order tracking, pricing calculations and cost of goods sold calculations.

Habits for successful soapmaker inventory tracking

Once you have the inventory solution in place, ensure that you build inventory management into your daily or weekly business routine. It’s useless to have a shiny piece of software to track your inventory if you aren’t putting the time in to make sure your numbers are accurate. It’s usually a good time to update your records whenever you do any of the following things:

  • Buy new raw materials
  • Make a sale (some inventory software will do this for you automatically)
  • Make a new batch of soap
  • Dispose of expired or damaged raw materials
  • Dispose of expired or damaged soap products

See our post for more ideas on how you can build good inventory and bookkeeping habits into your handmade business.

By following these tips, you can get started with your inventory tracking and start reaping the benefits it has to offer.

Nicole Pascoe Nicole Pascoe - Profile

Written by Nicole Pascoe

Nicole is the co-founder of Craftybase, an inventory and bookkeeping software product designed specifically for handmade sellers. She has been working with, and writing articles for, Etsy sellers for the last 12 years. Her passion is to help handmade sellers to become more successful with their online endeavors by empowering them with the knowledge they need to take their business to the next level.