Glossary

The words, in plain English.

38 terms every maker meets when costing, pricing and running orders. With examples.

Costing

True cost: Everything it takes to make one piece: materials, labour, running costs and waste. Not just the materials.; Example Fabric ₦27,000 plus lining, thread, buttons, 14 hours of tailoring, delivery and the offcut came to ₦58,300 for one agbada.; What is true cost? →
Unit cost: What one piece costs you to make. Your true cost for a single unit.
Recipe: The list of every material, and how much of each, that goes into one product, plus any labour or extra cost lines you add. In Sentralbee, a product’s recipe is how its cost is worked out.
Bill of materials (BOM): The manufacturing name for a recipe: every material and amount in one product. Same idea, more jargon.
Materials: Everything you buy that ends up in the product: fabric, flour, timber, thread, fondant, screws.
Labour cost: What the hours spent making a piece cost you: your own pay and any staff you pay for that job.; Example 12 hours at ₦1,000 an hour is ₦12,000 of labour.
Running costs: The costs of keeping the work going that people forget to price: gas and power, generator fuel, packaging, delivery. Also called overheads.
Overheads: Costs you pay whether or not you make anything this week, such as rent, salaries and subscriptions. Share them across your products so each price covers its part.
Waste: Materials you paid for but couldn’t sell: offcuts, spoiled batches, mis-cuts. It’s part of your true cost.
Offcut: The leftover piece of fabric, timber or leather after cutting. You paid for it, so count it in the cost of the piece it came from.
Weighted average cost (WAC): The average price you paid for a material across purchases, weighted by quantity. It keeps costs fair when prices change.; Example 10 yards at ₦5,000 and 10 yards at ₦7,000 give a weighted average of ₦6,000 a yard.
Cost of goods sold (COGS): The total cost of making the products you actually sold in a period. Sales minus COGS is your gross profit.
Variant: A version of a product, such as a size or colour, that uses different amounts of the same materials.

Pricing

Margin: The share of the price you keep after costs. A ₦100,000 sale with ₦70,000 of costs has a 30% margin.; Pricing custom furniture →
Markup: How much you add on top of cost. Adding 50% to a ₦70,000 cost gives ₦105,000. A 50% markup is a 33% margin.
Margin rule: The rule you set for pricing, as a percentage or a fixed amount added to the cost. In Sentralbee the Bee suggests prices from your rule.
Gross profit: What’s left from a sale after the cost of making it, before overheads.; Example Sold for ₦286,000, cost ₦248,500: gross profit ₦37,500.
Net profit: What’s left after every cost, including overheads like rent and salaries. The money the business actually made.
Break-even: The point where sales exactly cover costs. Below it you lose money; above it you start to earn.
Selling below cost: Charging less than a piece costs you to make. Every sale like this loses money, however busy you are.; Example An agbada that costs ₦58,300 sold for ₦55,000 loses ₦3,300.
Quote: The price you give a customer before they order. Cost it first, so the quote covers everything.

Orders and production

Made-to-order: Making a product only after a customer orders it, often to their size or spec.
Bespoke: Made for one customer, to their measurements and choices. Each piece is a little different.
Order line: One item on an order. On a made-to-order line you keep the agreed price and the measurements for that piece.
Promised date: The date you told the customer the order will be ready. Track it on every order so nothing is late by surprise.
Production stage: A step an order moves through, such as cutting, sewing and finishing, or baking, decorating and ready.; Production stages for small workshops →
Production board: A shared view of every order, laid out by stage, so the whole team can see what to make next and what’s late.
Work in progress (WIP): Orders that have started but aren’t finished yet. Too much at once usually means things get stuck.
Lead time: How long an order takes from the moment it’s confirmed to the moment it’s ready.
Aso-ebi: Matching outfits made for a group, often for a wedding or celebration. Usually a bulk order with many sizes and one deadline.
Stock count: Counting what you actually have on the shelf, then correcting the records so your numbers are real.
Low-stock level: The amount at which you want to reorder a material, so you don’t run out in the middle of a big order.

Money

Deposit and balance: Taking part of the price up front, often to cover materials, and the rest on delivery.; How to take deposits →
Milestone billing: Billing an order in parts: by percentage, when a production stage is reached, or on set dates.
Invoice: A bill that lists what the customer bought, the amount and how to pay.
Payment link: A link you send in a chat or email so a customer can pay by card or bank transfer in a few taps.
Money owed to you: Payments due for orders you’ve delivered but haven’t been paid for. Accountants call it accounts receivable.
Cash flow: The timing of money coming in and going out. A profitable business can still run short if customers pay late.

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