Introduction to Products

In CrafterBy, a product is a finished item you make and sell. Each product has a cost breakdown that adds together all the resources consumed to make it, and a selling price that you set to achieve a target profit margin.

What makes up a product's cost

A product's total cost is built from four components:

1. Material cost — the cost of every raw material, packaging item, and consumable used to make one unit. This is the sum of all individual material entries on the product.
2. Labour cost — the cost of your time (and your team's time) working on the product. Calculated as time spent multiplied by an hourly rate.
3. Machine cost — the cost of operating equipment: depreciation, electricity, maintenance. Calculated as machine hours used multiplied by the machine's cost per hour.
4. Overhead allocation — a share of indirect business costs (rent, subscriptions, insurance, utilities) allocated to each product. This is configured at the business level and applied automatically.

The formula is:

Total cost = Material cost + Labour cost + Machine cost + Overhead allocation

Your selling price must exceed this total cost to make a profit. The difference, expressed as a percentage of the selling price, is your gross margin.

A practical example

A soy candle is a product. It is made from:

• Materials: soy wax, fragrance oil, a wick, a glass jar, and a label
• Labour: 20 minutes of your time for measuring, pouring, cooling, and labelling
• Machine time: a few minutes on a heat gun for packaging
• Overhead: a share of studio rent, insurance, and accounting software

CrafterBy adds all of those together to give you the true cost of making one candle. You then set a selling price based on that true cost, rather than guessing.

Products vs. components

CrafterBy also has components (covered in the Components section). A component is a sub-assembly — something you make that goes inside a product, like a custom clasp you fabricate before assembling a necklace. Components have their own cost breakdown and are added to products like materials. If you make sub-assemblies, use components; otherwise, work directly with products.