What is Bill of materials?

A bill of materials matters if you assemble or manufacture products instead of just buying finished goods to resell. It tells you exactly what components and how much of each you need to build one candle, one soap bar, or one assembled gift box, so you can plan purchasing and costs correctly.

Use it to calculate how many finished units you can make from current component stock, and to work out the true cost of each finished item by adding up the cost of its parts. This matters most for stores that make their own products rather than buy them ready-made from a supplier.

Example

A candle maker's BOM for one 8oz candle is: 1 glass jar, 0.2kg of wax, 1 wick, 1 label. If they have 50 jars, 8kg of wax, 60 wicks, and 45 labels in stock, wax limits them to 8 / 0.2 = 40 candles, so 40 is the most they can currently make.

Common mistakes

• Forgetting packaging materials like boxes or labels in the BOM, not just the core ingredients.
• Not updating the BOM when a supplier changes a component or a recipe changes slightly.
• Confusing BOM quantities per unit with total quantities needed for a full production run.

Bill of materials and SteadyShelf

SteadyShelf forecasts and reorders finished goods and purchased SKUs, it does not manage bills of materials or component-level manufacturing.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Raw materials · Work in progress · Finished goods · Kitting · Unit of measure

Full inventory glossary

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