I’m sitting having a conversation with a friend about everyday stuff and she asked me about my soaps. With a crinkle in her brow she ask me a simple question that isn’t so simple to answer. Why is handmade soap so expensive?
The best answer I could give without to much explanation is to state a business term. ‘Its just the cost of doing Business’ combined with everyday market price for a healthy lifestyle. Not wanting to seem as if she didn’t know what I meant she paused with a black look on her face. So I started to elaborate on my short answer.
Importation
If you have an understanding of manufacturing or business or even just a little understanding on how the Bahamas works when it comes to products, then this part would make sense easily. Everything that is used to make soap has to be imported into the country, simply put there is a price for the actual product, then shipping then customs then VAT then profit and all this goes into making any type of product or selling anything. While it seems as if soap in the stores, which we call commercial soaps, are relatively cheap unfortunately ingredients for handmade soaps after being imported into the country, comes with hefty customs duties on the raw materials to make soap.
Cost is Relative
We have to discus the concept of cheap vs expensive. Both are relative to your state in life. If you find other things expensive such a s mineral water vs regular water that is to the point of your thought process and the way you were brought up. Some people see things differently. Commercially made products to them are always cheaper because of the process and chemicals used to reduce cost. Some people would prefer handmade items with more natural ingredients which they don’t mind paying a higher cost.
Lets take a look at the overall cost to make soap.
Ingredients
While soap itself is duty free the strange interesting thing is that the ingredients to make soap isn’t. Hey if the soap is duty-free then why is it that the raw materials to make the soap isn’t? That is such a weird thing to have happen, but most often we know our political leaders really don’t care about anything much so its something that gets overlooked. Another reason for this could be that the raw materials can be used for other things other than soap. In that case I can understand why there is a tax on the items.
Primarily oils are the main ingredient to making soap. In particular Olive oil is an ingredient that has to be imported because we do not produce it in the Bahamas so its taxed. Granted its just one oil so when you use multiple oils, as they all have different properties, you now increased your cost.
Tools
The tools needed to make soap safely are not readily available in the Bahamas and when you do find them they are outrageously priced. To give you an example. Using a proper mixing bowl of a particular size I cannot use any type of material. Glass… heat treated glass is preferable because it can withstand the heat of cooking soap and it is sanitary and easy to clean. Although there are many options that can be used, to find a safe one with a proper handle and pouring spout not to spill is more difficult than you may think.
To make sure no one gets hurt during the process you need proper tools. To have the right size bowl for safety reasons I’m now forced to import this simple tool. Again, purchase price, shipping, customs and VAT added to the tools. Beyond importation there are many other handy tools and necessary tools needed that can be found in the Bahamas but I would have to pay a higher price for them.
Cost of Doing Business
According to the Business License Bill 2010 of the Bahamas
BUSINESS – includes a profession, calling, vocation, occupation, trade, manufacture or undertaking of any kind, an adventure or concern in the nature of trade, for the purpose of creating a turnover;
BUSINESS LICENSE – is a grant or approval to conduct a business activity (whether a sales or service business) within The Bahamas . A “business” may be defined as a profession, calling, vocation, occupation, trade, manufacture or undertaking of any kind, an adventure or concern in the nature of trade with the view of generating a turnover or making money. Who needs a business license ? All persons conducting business within The Bahamas must be granted a license in accordance with the requirements of the “Act”.
To carry out business in other words taking money for a product or service, a business license is needed so now there is another expense to contend with. There are also other incidentals such as electricity, transportation picking up and dropping off, if there is a location/shop there is over head and then the time to make the product. All this and much more has to be considered in the cost of doing business.
The Market
The market is often the last consideration when sometimes it should be first. Who do you sell to and what are your competition selling at. You price points have to be within the market value after considering all the other expenses. Besides this, what is the use of making something to sell if no one knows about you? This is where marketing and sales comes into play. Again its a part of doing business but the market dictates that in order to purchase an item they need to know where you are on social media and other platforms. All this comes at a cost.
So to say that handmade soaps are expensive can be technically correct compared to commercial soaps that don’t use such high priced ingredients. One would ask, well if its so costly why not make soaps like the other companies? Well that’s another conversation for another day but then that means that persons who strive for a healthy lifestyle would then be forced to use the same chemically made products on their skin. Is that fair to them?
