Soap Business - Can You Make Money?

Many hobby soap makers’ dream is to start a soap business.

And, of course, you can make soap just for fun. But if it’s a business, you must look at several factors just like any other business. One big question is...can you make a profit?

Based on my experience the answer is...maybe! But you certainly should do some planning to make that profit happen. Otherwise, you’ll spend a lot of money and get little return. Let’s consider the basics of generating profit: sales and costs.

Your sales volume must be large enough to generate your profit goals. Best to think about these goals and how to reach them.

There are many ways to sell soap. My favorite way is to use craft fairs. You can sell consignment through gift shops, wholesale to retail stores, sell through an internet store or many other ways. Maybe some combination of these methods will evolve as your business develops.

Costs are the other side of the profit picture. One plus of starting a soap business, like a lot of craft businesses, is the low initial investment required. It costs very little to get started. We made and sold 35,000 bars of soap part-time in about four years. Our equipment cost less than $300 total. So it’s easy to get started. You just need molds, pans, a thermometer, spoons and a scale.

The cost of each bar of soap depends on the ingredients. The main ingredients are the base oils which turn to soap and the scent oils. Sodium hydroxide is used to make the reaction occur.

Ingredient prices vary widely. With wise buying, you should be able to make a nice scented bar of soap for less than $1.00 US, maybe even down toward $0.50. Of course, if you choose exotic oils, the price can be much higher.

The price you receive will depend on your market and your product. But it will also depend on your ability as a marketer. What separates your product from the competition? Is it a niche product? What about packaging? So your entire marketing approach will be important.

If you can sell a bar of soap for $4.00 with a cost of $1.00, you can potentially make some profit. If the price was $6.00, you have an even better chance. But it may be quite a challenge to get those premium prices.

If you are an effective marketer and you can control costs, there is profit to be made with a soap business. My goal in making soap was to make $20 per hour for the hours I spent on the soap business, not counting the time I spent at craft fairs. I usually did it after the initial learning period.

Al Bullington has made and sold soap for years through his family soap business. For information about what he’s learned visit http://www.soapbizkit.com.