Private Label Cost Calculator
Setup on the first order, or over the product's life.
Setup on the first order, or over the product's life.
Amortised unit cost
$7.95
$8.70 on the first order alone
Judging the product on the first order's $8.70 makes it look worse than it is; judging it on the amortised $7.95 makes it look better than the first order will feel. Both figures matter: one for the decision, one for the cash flow.
How the Private Label Cost Calculator works
Judging a private label product on the first order's cost makes it look worse than it is; judging it on the amortised figure makes it look better than the first order will feel. Both numbers matter, one for the decision, one for the cash flow.
Also known as: white label product cost · own brand product costing · private label startup cost
What private label adds to a generic product
Private label takes an existing manufactured product and applies your brand. The product cost is the supplier's, and everything on top is what makes it yours.
The additions: artwork and design, printing plates or screens which are usually a one-off per design, custom packaging with its own minimum order quantity, labels, and any regulatory marking required for the market.
Packaging is regularly the largest and the most underestimated. A custom printed box frequently has a higher minimum order quantity than the product itself, and a 5,000 box minimum against a 1,000 unit product order means four thousand boxes in storage.
Amortising the one-offs
Setup costs are invoiced once and belong to every unit that uses them, so the effective cost per unit depends entirely on how many units are made.
A £1,200 plate and artwork cost spread across 1,000 units is £1.20 each. Across 10,000 it is 12p. The difference is frequently larger than any unit price negotiation would achieve.
The complication is that the amortisation only holds if the later units are actually made. A first order of 1,000 that never repeats carries the full £1,200, and the unit cost model built on a 10,000 unit assumption was wrong from the start. Modelling on the first order quantity and treating later amortisation as upside is the conservative and usually correct approach.
The compliance layer
Putting your brand on a product makes you the responsible person for it in most regulatory regimes, which is a different position from being a reseller.
In the UK and EU that means responsibility for CE or UKCA marking where applicable, for a declaration of conformity, for technical documentation, and for product safety generally. For cosmetics it means a safety assessment and product notification. For toys, testing to the relevant standard.
These costs are real, they are per product rather than per unit, and they are frequently discovered after the goods have arrived. Testing a single product to a toy safety standard can run to four figures, which on a small first order changes the economics substantially.
What the brand is worth
The commercial case for private label is that the branded product commands a higher price than the generic one, and that the margin difference exceeds the added cost.
Sometimes it does by a wide margin. A generic product selling at £12 that supports £22 branded, at a £2.50 added cost, is straightforwardly worthwhile.
Sometimes it does not. In categories where customers buy on price and specification and are indifferent to brand, the branding adds cost and no price. Which category you are in is discoverable by looking at whether branded and unbranded versions of comparable products sell at different prices on the same marketplace, and it is a check worth doing before committing to the packaging minimum.
The defensibility question
A private label product is a generic product with your name on it, which means a competitor can order the identical product from the same factory tomorrow.
The defences are the ones that do not come from the product: brand, customer relationship, content, reviews, and distribution. None of those are in the cost model and all of them determine whether the margin survives.
Products where the only differentiation is the label tend to compress towards commodity margins within a couple of years as competitors arrive. Building a cost model that assumes today's margin persists is optimistic, and modelling the same product at a margin two or three points lower is the more useful planning basis.
Where to go next
The Private Label Cost question rarely arrives on its own. These are the ones that usually come with it:
- Tooling Cost Amortization Calculator — Amortise over realistic sales, not tool life.
- Packaging Cost Calculator — Better packaging can pay for itself in damage.
- Product Development Cost Calculator — The risk sits in the forecast, not the cost.
- Etsy Fee Calculator — Every Etsy fee on one sale, itemised.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
What does private labelling add to unit cost?
Customisation, custom packaging, and a one-off setup for artwork, plates or moulds. The first two are per unit; the third is spread across however many units you eventually sell.
How should setup be amortised?
Across realistic lifetime sales rather than the tool's theoretical capacity. Amortising a £1,800 setup across 50,000 possible units when you will sell 12,000 understates the cost fourfold.
Is private label worth it?
It buys margin and defensibility at the cost of capital and risk. Against reselling someone else's brand it is usually worth it; against launching without validating demand it usually is not.
Related calculators
Tooling Cost Amortization Calculator
Amortise over realistic sales, not tool life.
OpenPackaging Cost Calculator
Better packaging can pay for itself in damage.
OpenProduct Development Cost Calculator
The risk sits in the forecast, not the cost.
OpenEtsy Fee Calculator
Every Etsy fee on one sale, itemised.
Open