This generated value is very handy for a small business or a large enterprise. You may ask yourself, “if I spend $2,546.87/kg on an anti-aging active, that is packaged from the supplier in a 4 KG jug and used at 0.50% w/w in formula, how many 3 oz finished bottles can I make before I have to re-order that item?”
The finished units made until reorder per item column in the calculator gives you the answer! In this case, it would be 9,406. Meaning, with that ingredient, you can manufacture and produce 9,406 x 3 oz bottles of your finished product before you have to purchase another 4 KG jug from the supplier.
Calculating finished units made until reorder per item is critical to knowing your ROI (return on investment). In the scenario above, you’re total spend for that ingredient is $10,187.48 (4 KG x $2,546.87). Before you spend $10K on one ingredient, you need to know how many finished bottles can be produced to recoup your investment. If you’re spending that much money on 1 anti-aging ingredient, it’s safe to say that it’s very important to your formula and your marketing proposition. Let’s say your MSRP for the 3 oz finished product is $30 – at that price, 9,406 x 3 oz bottles sold into the marketplace earns you $282,180 in revenue! Looks like that initial $10K investment on the anti-aging ingredient paid off, nice work!