Tips for Selling Soap
Selling Homemade Soap, Regulations, and Best Practices
Reading Time: 5 minutes
Selling soap can be a rewarding and potentially lucrative part of your homesteading income streams. When it comes to selling soap, there are many factors to consider. Keeping prices of raw materials under control, advertising, packaging, and delivering to the customer all have a long list of possible choices to customize your business to your needs and the needs of your customers. But what if you are just getting started with selling? Perhaps you’ve spent the last year perfecting your recipe, sourcing your ingredients, and creating your packaging concept. What else remains to be done to prepare you for the world of selling soap? When selling homemade soap, regulations for small businesses must be taken into account. At the very least, you need a business license as a sole proprietor, operating with your social security number as your tax ID number. While a social security number is perfectly acceptable as a tax ID for a sole proprietorship, there are times when you will still need to obtain an Employer Identification Number — especially if your business grows enough to employ others. All of this information and more can be found on your state’s Department of Revenue website. The business license is usually dispensed at the office of the County Clerk.
So, you have been to the County Clerk’s office and obtained your business license. What is next? Consider pricing and taxes on your soaps. Are you going to charge tax as an extra amount, or include the sales tax in the pricing structure of the soap? You will have to submit sales tax quarterly in most cases. Quarterly sales tax forms, usually available online at your state’s Department of Revenue website, can often be either printed and filled out or filed online. If selling soap through an online site, such as selling soap on Etsy, Shopify, or Zazzle, you will need to develop your shipping prices in advance for each product listed. Using an online shipping service such as Pirate Ship can save you money on postage. It’s also good to know that the major shipping company websites offer the option of scheduling package pickups at your home or business.
When developing your packaging concept, it is important to follow all the applicable laws, both federal and local, regarding soap selling. One important rule to follow is that every single ingredient in the soap needs to be listed, in order of prevalence, on the label. This includes the ingredients used for soap scents and color, as well as any herbs or other additives. Another important rule to remember is to never, ever make any sort of claims about your product being able to treat, cure, or prevent any kind of condition. For instance, you can say your soap is gentle. You cannot say it is good for eczema. That is a medical claim and makes your soap subject to cosmetic rules and regulations, which are much stricter. This is also important to remember when you are talking to potential customers. If a customer discusses a condition with you and asks whether or not the soap can help, it is important to be careful what you say in order to avoid making any kind of a medical claim. In any event, soap is a wash-off product and not intended to treat any condition. The main purpose of handmade soap is to be as gentle and non-irritating as possible while also providing cleansing properties. With a high enough superfat, soap can also be a mild emollient. That’s about all the claims you can make.
Marketing and advertising your product are other aspects to consider. Luckily, good soap tends to sell itself in many ways — customers tell other customers and word gets around. Friends and family are an excellent base when you start out selling your first soaps and while you are getting the recipe figured out. But once you are ready to move past that, there are really two main formats for selling: online or in person. In-person sales may look like farmer’s markets and craft shows attended throughout the season. Online sales require an online presence for your company to build brand recognition. Consider starting a company Instagram and Facebook page. A website is another good venue for selling online, and many shopping cart/credit card acceptance systems such as Square also offer basic website hosting services. In a lot of ways, in-person sales are easiest, because the customer is presented with the product and can touch and smell it immediately. Once they smell it, they often buy it. Sanitary packaging is critical in this scenario. If you are using soap boxes, set aside one soap of each fragrance as your sample bar. Change out the soap box often to keep it clean. If using shrink wrap packaging, frequent wipe-downs with a sanitizing cloth are a good idea. If you sell your soap naked, it is best if the customer is not allowed to handle it at all. Set them further back on the table to discourage handling, or consider placing small sample bars on dishes or paper plates that can be lifted and smelled without touching the product. When selling online, photography is very important. You may want to invest in a small lightbox for photographing your soaps in their best light. A fancy camera is not needed, but good lighting and a pleasant, non-distracting backdrop are essential.
Selling soap can be a rewarding way to earn money while indulging in your creativity and using the resources you have on your homestead. In a short period of time, it is easy to obtain a business license and establish tax-free status with your soap suppliers using your Tax ID number. Whether you choose to sell in person at farmer’s markets or events, or online through a website such as Etsy, there are endless possibilities in terms of customizing your business to suit your needs and resources. While there is a lot of new information to learn to start any business, once you have a good quality recipe, soap seems to sell itself to some extent. Everyone wants comfortable, well-moisturized, non-irritated skin, and handmade soaps provide that in a luxurious, enjoyable way.
Are you planning to sell your soaps? Do you already make money with goat milk soap? Please share your experiences and tips with us!