Can you make money selling soap?

[sephera]

So is it possible to make money selling soap?

 

[The Efficacious Gentleman]

Yes it is

 

[sephera]

How?

 

[The Efficacious Gentleman]

You sell it for a profit.

Ah, well, to be more open, you spend a lot of time getting a recipe that works really well, to the stage where you know enough about making soap in general and your recipes in particular that you can almost make it blindfolded. Then you sell it for a profit.

I am unwilling to go in to more details because looking at the other thread you have enough to do just learning about soaping to have any head space for selling at this stage.

 

[Dorymae]

Hard work is how. You need to first formulate recipes, make sure you can duplicate the process again and again. Learn what colors and fragrances can be used with the recipe. Give out samples to friends and family ask them for their opinion and tell them to be critical and brutal. Learn go back and learn some more. Then when you are sure you could almost make your soap in your sleep, and you've perfected your formula - start learning about labeling and labeling laws....

Ok so this goes on and on until you have a stock of soap that is made properly, labeled as well as possible. Now sit down and write a business plan. I'm not kidding because if you are going to start a business you need to have a clear blueprint of the process if you really want to succeed at it.

You need to ask yourself the hard questions. Can you afford to go into business? How much capital do you have? What happens if your capital is gone, you are low on supplies, you have orders for soap and no money for supplies?? You need to know where you will get the funds to continue.

So you have your soap, your label, your business plan, now you need to go to your city hall and ask about obtaining a business license. Ask about both local and state laws, they will help you. Now contact your state tax department for a sales tax number and the IRS for a Federal number. Go to the bank and open up your business checking account and make sure you get a good accounting software for your computer and that you (or someone you trust) knows how to use it.

You should have already (during the business plan phase) figured out how much you spend on making soap and how much you will be selling for so now you need to market your soap.

Depending on your budget (again your business plan) you will put your soap out in front of people in different venues and sell your soap. The difference between what you spent and what you made is your profit.

Congratulations you have just made money selling soap!

 

[roseb]

Dorymae, great answer except that you forgot a couple of things...you have to have hard skin (ppl say the rudest things) and be willing to stay up to all hours making soap.

 

[Dorymae]

Both true but they should have also covered that in the business plan. Hours willing to work and how to handle customer complaints (and just plan rude people). Business plans are so important and usually overlooked because people hate writing everything down (especially creative people and we are that!) If I could give one piece of advice to someone it would be to write a business plan once per year - stick to it as well as you can and don't forget to revise it as you need to.

 

[pamielynn]

You also need to be willing to experiment and possibly lose money while learning to make great soap. Then, to be able to sell for a profit you need to find that "sweet spot" where people will pay what you need to make that profit. It's like any other business that wants to be successful.

 

[Dorymae]

I wanted to add here that most businesses do not make a profit for between 3-5 years. This business is NOT an exception. You will spend a lot of money on supplies, packaging and equipment and you will need to sell a lot of soap before you make that money back.

This is why a business plan is key. You need to be able to survive and slowly gain momentum over the first few years. The following blog is a good read from Forbes.

http://www.forbes.com/sites/ericwagner/2013/05/23/5-key-business-model-components/

 

[seven]

making money from selling soap is no instant thing. it's not only a matter of having a recipe taken off the internet, making soap, and sell it.

perfecting the craft is one thing. marketing, etc is another beast. all in all = HARD WORK

 

[judymoody]

I would add that the handcrafted CP soap market is incredibly saturated by now. In addition to hard work, research, a lot of up-front investment, and a sound business plan, you should also investigate local competition (if you were to sell at a farmer's market or craft market, how many established soapers are there in your area already?) Go on Etsy and there are probably thousands of people selling CP soap. Breaking into internet sales is tough under those conditions.

 

[Meganmischke]

Also do not forget about insurance!

 

[cmzaha]

Judymoody is 100% correct. I used to make around $300 per night at my farmers market, this year I am lucky if I can bring in $100 over my booth. This barely covers product expense, gas, food while at the market, and insurance. The market manger has now brought in 3 newbie soapmakers that undercut my price per bar by $2.00-$3.00, and customers are not wise enough to know either they get a smaller bar, cheaper oils, or less fragrance in order for them to sell at the price they do. They are hobby sellers that do not care what they do to the market. Bad business to undercut prices. At least in California the markets are brutal and online is extremely difficult. We have seen our online down 30% from this time last year and my daughter works daily at promoting our online store. The market is saturated with new soapmakers thinking they are going to make money /living. Going to markets multiple times a week is very hard tiring work.

 

[citygirl]

Thanks for your insight. I just started making soap myself (as a hobby) and wondered what the market was like. I suspected that it is quite saturated right now. A business is always hard work :-D

 

[seven]

i would like to add that building an online presence takes hard work, and a loooootttt of patience. it also is an advantage to be active in the social medias: facebook, twitter, instagram. think of them as free advertising and a way to reach more people. don't give up if it takes a while to get your first online order. even though you have a website set up but people don't know about it, thus you'll need to advertise, advertise, and advertise. look at the local forums and local marketplaces where you can sell or advertise for free. anything counts.

 

[dixiedragon]

I used to belong to a soapmaking group for my state, and several of the members did this as a business. They spent A LOT of time on this. They drove all over the state going to craft shows, etc, they were constantly on their webpages updating their inventory and mailing out products, etc. They pretty much spent EVERY weekend selling soap.

 

[shunt2011]

I agree with what others have stated. You can make money at this but it takes a lot of time and energy. Lots of production, shows, wrapping, labeling etc.....you have to commit your self to making something of it. A lot of us also work full-time jobs on top of making our soap business work. It all depends on how much you want to put into it.

 

[Sinful7]

I think everyone here did a great job of explaining! I sell locally and pretty much by word of mouth. I do very well at the moment, but have balked at going online or larger due to my comfort level. I fear I am not ready for the larger scale sales and will not sacrifice even a little in the product department to make $.

 

[Shalisk]

Judymoody is 100% correct. I used to make around $300 per night at my farmers market, this year I am lucky if I can bring in $100 over my booth. This barely covers product expense, gas, food while at the market, and insurance. The market manger has now brought in 3 newbie soapmakers that undercut my price per bar by $2.00-$3.00, and customers are not wise enough to know either they get a smaller bar, cheaper oils, or less fragrance in order for them to sell at the price they do. They are hobby sellers that do not care what they do to the market. Bad business to undercut prices. At least in California the markets are brutal and online is extremely difficult. We have seen our online down 30% from this time last year and my daughter works daily at promoting our online store. The market is saturated with new soapmakers thinking they are going to make money /living. Going to markets multiple times a week is very hard tiring work.

The silver lining is what my jewlery teacher in HS told us:

"I am the other jewler in town. I make a quality product, my compatition, has the buisness plan of 'you can swindle everyone once...eventually though they catch on and you lose a customer for life' " ....My jewlery teacher is now the only guy in my town and in 2 other cities.

THe worthless ones will die off or get bored

 

[kmarvel]

Dorymae, what accounting software do you use??