What a supplement actually costs to make.
Founders consistently underestimate landed cost. Here's a realistic line-item breakdown for a 60-capsule ashwagandha + vitamin D SKU at 5,000-bottle and 25,000-bottle runs from a typical EU CMO in 2026.
5,000 bottles, low MOQ run
| Line | € / bottle | % of COGS |
|---|---|---|
| Actives (KSM-66 600 mg + vit D3 25 µg) | €0.42 | 13% |
| Excipients (microcrystalline cellulose, magnesium stearate) | €0.04 | 1% |
| Vegetable capsule shell × 60 | €0.30 | 9% |
| Encapsulation + blending labour | €0.55 | 17% |
| QC + finished product testing | €0.35 | 11% |
| HDPE bottle 150 cc + cap + induction seal | €0.45 | 14% |
| Label (4-colour, BOPP) | €0.18 | 6% |
| Carton + leaflet | €0.12 | 4% |
| Packaging labour | €0.20 | 6% |
| Regulatory + artwork review (amortised) | €0.25 | 8% |
| CMO overhead + margin (~12%) | €0.34 | 11% |
| Ex-works COGS | €3.20 | 100% |
25,000 bottles, standard run
Same formulation, 5x volume. Ex-works COGS typically drops to €1.95–€2.20/bottle. The savings come from labour amortisation (encapsulation labour drops to ~€0.25/bottle), bulk pricing on bottles and labels (~25% off), and QC fixed costs spread further. Active and shell costs barely move, they're material, not labour.
Beyond ex-works: landed and retail-ready
- Inbound freight (CMO to 3PL): €0.05–€0.15/bottle EU intra.
- 3PL inbound + storage: €0.08–€0.20/bottle/year typical.
- Pick-pack-ship D2C: €2.50–€4.50 per order (often the bigger line than COGS).
- Payment processing: 1.5–3% of revenue.
- Returns / damages: budget 2–4%.
Healthy retail and D2C economics
For a D2C brand targeting €29.90 retail, COGS of €2.20 at 25k volume keeps gross margin above 75% after 3PL, leaving room for €15–€20 CAC. For wholesale at 50% off retail (€14.95 to retailer), you want COGS under €4.50 all-in (or your retail price needs to climb to €34.90+). If your CMO quotes you €5.50+ at standard volume on a simple capsule SKU, get more quotes, that's high.
Send Jake your current CMO quote and the formulation. He'll tell you if it's fair and intro alternatives if it isn't.