The effect of carbonyl iron powder, FeSiCr alloy powder, and annealed FeSiAl alloy powder, both individually and in binary combinations, on the density, microstructure, and magnetic properties (including permeability and power loss) of inductors manufactured by molding compaction was investigated in this study. The investigation demonstrates that hysteresis loss dominates power loss in the tested frequency range. Due to higher compacted density and reduced coercivity, adding 50% carbonyl iron powder to annealed powder resulted in the lowest hysteresis loss, allowing for domain wall movement. On the other hand, adding 50% FeSiCr alloy powder to annealed powder resulted in higher hysteresis loss due to impurity components hindering domain wall motion. Due to extreme plastic deformation, the carbonyl iron powder and FeSiCr alloy powder combinations displayed the most significant hysteresis loss. Eddy current loss followed the same trends as hysteresis loss in the mixtures. This study provides important insights for refining the soft magnetic composite design to obtain higher magnetic performance, while minimizing power loss.