How would I get started selling soap?

[yeahhtrue]

Hey guys. I've been reading through this thread, because I've been thinking of selling soap once I start to really get the hang of it. I'm a college kid and besides the fact that making soap is fun it seems like a cool way to (possibly) make money as well. I think I have more questions about what's involved with selling soap now that i've read through some of this thread than I did beforehand though.

First..insurance. It sounds like pretty much every seller on here has insurance and wouldn't even think of selling without it. What exactly is the insurance for? I know it will cover different things depending on where you purchase it from, but in general, is it for damage to your inventory? Or being sued by a customer? Or something else?

Second..permits. I see that people have had to apply for all kinds of permits, register as an actual business, etc. Is that all mandatory? For example, if I want to sell small quantities of soap on etsy, or maybe bring some to a craft fair, do I need to be a registered business?

Is there any other technical stuff I should know that I would need to take care of before I can just make soap and sell it? Is there maybe a soap selling tutorial or a place to get started that you guys know of? Any help would be great.

 

[SilverMaple]

Insurance: yes, you need insurance. Most people carry it for product liability over anything else. Say someone buys or is given a bar of your soap, steps on it in the shower and slips-- they can sue you. Or, even if they drop it on their toe (heard of that happening.) Or they don't read the label, are allergic to shea, and break out in spots-- yup, you can be sued over that, too. Most insurance will cover at least some of your inventory in case of disaster, but that does vary. Sometimes homeowners' insurance will cover a small home-based business, but not usually. Be sure to check and shop around. RLI offers policies that are relatively inexpensive for small-scale soapers selling under $5000 per year, but you cannot make candles and be covered, so that is limiting to many.

Permits, etc: These vary from location to location so you will have to do some checking. Some require you to have one before selling ANYTHING, others are OK with you doing craft shows without it, etc but you still need to keep careful records and pay sales tax and usage tax on your sold items in most cases. I needed to register my business with the state and have a state tax ID number as it's required at most of the shows around here should I start doing more of them. I also needed to register with my county, and would have had to register with the town we live in if I actually sold retail at my home, which I do not; or if I had a stand-alone business structure. It wouldn't hurt to start talking with a business tax and accounting firm to get yourself off on the right foot and find out what is needed in your area. You may also need to register with the IRS if your business meets certain requirements.

 

[Tabitha]

Insurance: You need this ti protect yourself from customers suing for skin irritation, etc.

Permits: The best thing to do is go to your local biz tax office & just tell them you do not know where to start. They willtell you the minimum requirements & make additional suggestions. It varies state to stae & county to county. For instance, in TX if you sell 1 bar of soap, just 1, you are required to register as a biz so you can collect & pay sales tax. Registering for a biz in TX is just filling out 1 short form. It super easy!