Label and barcode costs per unit for food products

The label cost per unit is not just what the printer charges per label. Add the design spread over every unit you will sell with it, the printing, the labels you throw away when something changes, the time it takes to apply them and, if you sell to shops that require one, the barcode. The total per bottle is often more than double the printing price.

The five parts of a label's cost

1. Design

You pay for design once, but it covers many units. Spread it like this:

design per unit = design cost ÷ units you will sell before it changes

If you do not know how long the design will last, use a year of sales. Every time you ask for a change (new weight, new flavour, a correction), add that cost to the design total.

2. Printing

This is the part everyone sees: the price per label in the run you order. It drops a lot with quantity, which is why it is tempting to print thousands. Before you do, read the guide on packaging minimum orders, which shows what a long run really costs if the label changes before you use it up.

3. Reprints

A label is scrap the moment anything it says changes. The usual reasons:

• You change the recipe, and with it the ingredient list or nutrition information.
• You change the net weight or the bottle size.
• You move, or change your phone number or social handles.
• You have to add or remove a warning or other required wording. Check your local labelling rules whenever the recipe changes.
• You get a registration or certification number that has to appear on the pack.

The labels you bin do not vanish from your numbers: their cost is carried by the units you did sell.

4. Time to apply

Labelling by hand takes time. Measure how long a batch takes and divide by the number of bottles. That time is worth the same as the rest of your kitchen hour; the guide on food labels covers what has to be on the label so you do not have to do it twice.

5. Barcode

If you sell to supermarkets, delis with scanners or online marketplaces, you will probably be asked for a barcode. Barcodes come through the official barcode organisation in your country. Ask them directly what it costs, whether the fee is yearly or one-off and how many codes are included. We do not quote amounts here because they change and depend on your situation.

To bring it into your cost:

barcode per unit = yearly fee ÷ units per year of all the products that use it

If the fee is one-off, spread it over the units you expect to sell in the years you plan to make that product.

Worked example: the label on a bottle of hot sauce

You sell hot sauce in 150 ml bottles. You sell 300 bottles a month, which is 3,600 a year. These are your numbers:

• Design: you paid $600 for the front and back label. After five months you changed the recipe and the designer charged $150 to update it. Total: $750.
• Printing: the printer charges $0.14 per label in runs of 1,000.
• Reprint: when the recipe changed you had 300 old labels left. Over the year you bought 3,600 + 300 = 3,900 labels.
• Applying: you timed it at 15 seconds per bottle. You value your working hour at $15.

Work it out per bottle sold:

The label does not cost you $0.14, which is what the printer's invoice says. It costs you $0.42 per bottle. The gap is $0.28 per bottle; over 3,600 bottles a year that is about $1,017 that was missing from your costing.

If you also need a barcode: every $100 of yearly fee, spread over 3,600 bottles, adds 100 ÷ 3,600 = $0.028 per bottle. Multiply that by the fee you are quoted, in hundreds. If you have three flavours selling the same volume and the fee covers all three, divide by 10,800 bottles, not 3,600.

How to bring the cost per unit down without the risk

• Separate what is fixed from what changes. A front label with your brand, which rarely changes, can go on a long run. The back label, with ingredients, weight and nutrition panel, on short runs.
• One base for several flavours. The same design with a flavour sticker or a different colour saves design costs and lets you order more of the base.
• Wait before the long run. While the recipe is still changing, print small. Once you have gone several months without touching anything, order the long run.
• Time the labelling. If a batch of 50 bottles takes half an hour to label, a simple jig or guide can save minutes per batch. Measure before and after.

Where this number goes

The label cost goes with the bottle, cap and any sticker into your packaging cost per unit. From there it goes into your loaded cost and your price. To check how much margin your price leaves after adding these cents, use the markup and margin tool.

If you sell several packaged products, the packaged food guide shows how to bring ingredients, packaging, labels and channel into one calculation.

Do it with the calculator

In the food cost calculator, enter $0.42 (or your own total) as the label cost inside your recipe's packaging, not just the printing price, and you will see how much the cost per bottle and the margin in each channel change.