"I think this costs about $5 in materials" is how most crafters price their work. The problem? "About" could be off by 50%—and that uncertainty quietly drains your profits.
Knowing your exact material costs isn't just good practice—it's essential for pricing correctly, identifying waste, and understanding which products actually make money. This guide will show you how to track material costs like a pro.
Why Material Tracking Matters
Accurate material tracking helps you:
- Price correctlyKnow exactly what each item costs so you can set profitable prices with confidence.
- Identify profitable productsDiscover which items have the best margins and which are secretly losing money.
- Spot waste and theftCompare expected vs. actual material usage to find where supplies disappear.
- Plan purchases betterUnderstand consumption rates to buy in bulk at the right time and avoid stockouts.
Calculating Per-Unit Material Costs
The key to material tracking is converting your purchases into per-unit costs. Here's the basic formula:
Per-Unit Cost = Purchase Price ÷ Usable Units
Notice we said "usable units," not total units. If you buy a yard of fabric but lose 10% to cutting waste, you only have 0.9 yards of usable material.
Examples by Material Type
- Yarn: $8 for 200 yards$0.04/yard
- Beads: $12 for 500 beads$0.024/bead
- Fabric: $15/yard (36" wide)$0.42/sq ft
- Wire: $25 for 100 ft$0.25/ft
- Clay: $20 for 5 lbs$4.00/lb
Tired of calculating craft costs manually?
CraftsTrack automates pricing so you can focus on what you do best—creating.
Building Your Tracking System
A good material tracking system has three components:
- Material inventory list. Every material you use, with current cost per unit. Update this whenever prices change.
- Recipe/project cards. For each product, list every material and exact quantity used. Include packaging and finishing supplies.
- Purchase log. Track every supply purchase with date, supplier, quantity, and price. This helps you spot price trends and compare suppliers.
Creating Project Recipe Cards
A recipe card documents exactly what goes into each product. Here's an example for a handmade candle:
- Soy wax (8 oz × $0.40/oz)$3.20
- Fragrance oil (0.5 oz × $1.20/oz)$0.60
- Wick (1 × $0.35 each)$0.35
- Jar (1 × $1.50 each)$1.50
- Lid (1 × $0.40 each)$0.40
- Label (1 × $0.15 each)$0.15
- Box (1 × $0.80 each)$0.80
- Total material cost$7.00
Create a recipe card for every product you sell, and update it whenever materials or quantities change.
Accounting for Waste and Loss
Not every ounce of material ends up in a finished product. You lose material to:
- Cutting wasteFabric scraps, wire ends, clay trimmings that can't be reused.
- Practice and mistakesFailed attempts, learning projects, items that don't meet quality standards.
- Samples and photographyProducts used for photos, craft fairs, or giveaways.
- Spillage and spoilagePaints that dry out, resins that cure wrong, materials that degrade.
Add a waste factor of 5-15% to your material costs depending on your craft. Track actual waste for a month to find your real percentage.
Adjusted Cost = Material Cost × (1 + Waste Factor)
Inventory Tracking Methods
- SpreadsheetSimple to start, free, customizable. Works well for small inventories. Manual updates required.
- Dedicated SoftwareAutomates calculations, tracks trends, integrates with sales. Worth the investment as you grow.
- Physical CountRegular counts verify your records. Monthly for high-value items, quarterly for everything else.
- Par Level SystemSet reorder points for each material. When stock hits the par level, it's time to reorder.
Pro Tip: Do a physical inventory count at least quarterly. Compare actual stock to what your records say you should have. Big differences reveal tracking errors or unnoticed waste.
Tracking Supplier Prices
Material prices fluctuate. Keep a log of purchases to:
- Spot price increases before they hurt your margins
- Compare suppliers to find the best value
- Time bulk purchases when prices are low
- Negotiate better rates with data to back you up
Review your top 10 materials monthly. If a price has jumped more than 10%, it's time to either find a new supplier or adjust your product prices.
Your Material Tracking Action Plan
- List all materials you use regularly. Calculate per-unit costs for each.
- Create recipe cards for your top 5 products, listing every material and quantity.
- Estimate your waste factor based on your craft type (start with 10% if unsure).
- Set up a purchase log to track every supply order going forward.
- Schedule monthly reviews to update costs and check for price changes.
Material tracking might not be the glamorous part of running a craft business, but it's what separates profitable sellers from those wondering where all their money went. Start tracking today, and you'll make better decisions tomorrow.
Price Your Crafts with Confidence
CraftsTrack helps artisans and makers calculate accurate costs and set profitable prices—automatically.
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