Homemade soap making is something you probably don’t hear about too often. We all know about it but we just assume it’s one of those things ‘crazy aunt Zelda’ does after she puts all her cats to bed.
But homemade soap making is more than that. It’s not just a hobby that a few select folks enjoy. In fact, there is quite a large community of “soapers” and I’m sure they would jump at the opportunity to make money selling homemade soap.
Table of Contents
- Making Money Selling Homemade Soap
- Starting Your Homemade Soap Business
- How Much Do Soap Makers Earn?
- Can You Sell Soap Online With Your Own Website?
- Selling Handmade Items Through Affiliate Marketing
Making Money Selling Homemade Soap
I’ve been brewing my own beer for a few years and I love it. I’d jump at the chance to turn that hobby into a profitable business.
Unfortunately, the laws surrounding selling beer are very strict, requiring special licensing and a number of other complicated factors that would make it a not-so-fun headache, instead of a fun hobby.
Doubly unfortunate, there are also some very strict laws surrounding soap making too. I haven't dug too deep into the law, but according to the comment section, it's a little complicated and strict to comply with the FDA, FTC, and the Consumer Product Safety Commission to legally sell soap.
Turns out, sometimes it's a cosmetic item, sometimes it's a drug. Just another reason why promoting soap might be a more lucrative venture than selling it.
Update 2017: I found this post from Mr. Money Mustache about his wife that's making “five figures” from her soap business. I assume that's yearly. She does give some insight into selling soap on Etsy, including how she prices her soaps and other details.
Starting Your Homemade Soap Business
The first thing you need to do is figure out what type of soap you want to make. There is an unlimited number of styles, scents and looks when it comes to soaps, so don’t get bogged down in all the possibilities.
You can find plenty of soap recipes online, just like you can with regular recipes. Start with one that’s simple and go from there. Pinterest and YouTubeis a great place to look for new recipes.
What Equipment Do You Need To Make Soap?
Soap, like anything else you make, requires different equipment for different recipes. There are different processes for making soap — some you can make cold (cold process soap) and others you make with heat (hot process soap).
As you can imagine, hot process soaps require different equipment than cold process soaps. In either case, you can go as big or small as you want. For example, a professional Chef hoping to open his or her own restaurant is likely going to buy industrial equipment to fit the need.
However, you can cook many of the same things the chef will cook in your home with much less. The same is true for making soaps.
There are large, industrial sized tools you can find to take your soap making venture into the stratosphere.
But let's start small for now. Making soap on a smaller scale requires many of the same things you need when cooking a meal in your home, so you probably already have many of the basic kitchen utensils that you will need for making soap.
Things like crockpots, glass bowls, baking sheets and spoons are all used in soap making.
However, you should expect to spend some money on the things you may be missing. Some less common kitchen items you might need are a kitchen scale, stick blender and a thermometer (all shown below).
You can see the prices for each item in the image.
You may be able to find cheaper versions but I found these on Amazon, and although I didn’t feature the cheapest ones, I certainly did not choose the most expensive.
This gives us a cost of $149.73.
You may, or may not have one or all these items in your home already.
But the cost illustrates the lowest possible amount you could expect to spend to start a soap making business from your home.
Granted, it may not be on these specific items, but given all the variations in making soap (and all the things we haven’t calculated yet, like packaging and storing) I think that number is a fair, if not modest, estimate. It doesn't factor in things like advertising, transportation, shipping, time, ingredients, and other unexpected costs you may run into.
Personally, I would set aside $300-$500 for your business if you want to make money selling homemade soap and are starting with no equipment or supplies.
How Much Do Soap Makers Earn?
Now that we’ve looked in to what it might take to get started making homemade soaps, let’s look at what you can expect to make selling them.
Making homemade soaps allows you the freedom to price things however you see fit. You can charge a buck for your soaps or you can charge a hundred bucks. It’s completely up to you.
You can look around and see that the price of homemade soaps varies just as much as the different styles of soap. However, in all my research I found one place that all soapers agree is the best place to sell their stuff: Etsy.
Looking at Etsy we can get an idea of what you might expect to make by selling homemade soaps.
Etsy, if you don’t already know, is a marketplace, similar to Amazon, but specifically for people who want to buy handmade things, instead of buying products (like soap) from big department stores. For crafters and DIYers Etsy is a place to sell goods.
Etsy has more than 15,000 listings under “Homemade soap”!
What's Average Selling Price of Homemade Soap?
On Etsy, the average selling price of homemade soap looks to be between $5 and $10 per single bar. However, it seems that most soapers are pricing their listings between $2 and $4.
Some of them are offering multiple bars of soap, while others, like the one above, are selling one bar at a time.
One thing I noticed is that even the super fancy, one-of-a-kind soap bars are selling for this price range.
What about selling your soap somewhere else?
Amazon just launched their Handmade at Amazon store, which is supposed to compete with Etsy. It's not immediately clear if your handmade items will be listed alongside other Amazon sellers though.
When I typed in “handmade soap” into Amazon, what turned up was quite a bit more refined and commercial than what was being sold on Etsy. Pricing was a lot more in-line with what I'd suspect from corporate soap makers as well, with six bars being sold at the price of two on Etsy.
Etsy doesn’t reveal any information regarding product or seller rankings like Amazon does, so it’s difficult to know exactly how much a seller is making. However, thanks to CraftCount.com, a site that pools information on Etsy sellers, I was able to get an idea.
In the Handmade Bath and Body category I was only able to find a few sellers that are selling homemade soaps only. Most were selling a variety of other things like lotions, shampoos, fabrics, etc.
As of, October 17, 2015 (when I originally published this article), LoveLeeSoaps is ranked #11 in the Handmade bath and Body Category, making her the #1 result for soap-only sellers. She has made 24,356 sales since 2007 and almost all of her items are priced around $5, so I'm just ballparking that she'd make between $15,000-$20,000 per year. Just a guess.
Her type of soap-making is what I would envision most people would be doing – cute, imperfect, unique handmade soaps. She also sells about 480 different kinds of soaps. Her product listing stretches across twenty pages on Etsy.
That’s not a lot of money. It’s certainly more than I thought, but when you break it all down it’s barely minimum wage.
With that many different products, I’m sure she is working very hard. Remember, LoveLeeSoaps has been at this for eight years, and she is barely making enough money to notice. Lots of other sellers aren’t making anything!
The Little Flower Soap Co. is ranked #256 is all of Etsy. They have a decent range of soaps, but they are not as creative as other sellers. They are just bar soaps with different smells and colors. They also sell a wide variety of other items in the “bath & body” category, including candles, bath bombs, gifts, and more.
They've made almost 60,000 sales since 2011, which would be about 6,600 sales per year. Items in her shop are about $5-$20, so let's just call it $12. We don't know the average order size, but even at just 1 item per order, that would be $80,000+ per year.
There are three people in her seller profile photo, and you've still got to pay taxes, shipping, insurance, and other business costs. Maybe each person in the shop could pull down $30-$60k depending on a lot of factors.
Is soap making profitable? Yes, but it depends on a lot of factors outside of, “is the soap good”, or “is the soap cute”. We've talked a lot about the price of soap, but you really need to look at your profit margin because each person's cost of doing business is going to be different.
Just a personal anecdote: A buddy of mine owns a brewery and had a friend of his make some homemade soaps from the excess grain he used to brew beer with. It's quite common to do this, and you can get some really great smelling, fun soaps. However, when the soap maker took her wares to the local farmers market, they only sold one from the entire day.
Plus, I have actually bought beer and coffee soaps online before. Though they are fun and interesting, over a long period of time, they can become super expensive. In my opinion, for the average person, the “fun” factor will only last so long. I'm back to using Irish Spring these days.
Can You Sell Soap Online With Your Own Website?
One other thing that you need to think about is how big you want your business to be, and how much time you want to dedicate to growing it. The easy way, that most people envision, is physically selling the soaps at a local market. This is a strategy that doesn't involve too much work, though you do need some preparation!
You'll need a table, maybe a banner, and packaging materials. You'll need to pay stall fees (ranges, about $10-$50/day or $300+ per season), and may be required to get a business license to comply with city regulations.
If your soap making business is going to be profitable, you need to factor things into the equation like how many soaps do I need to sell to break even?
If a local market is going to be too costly or time consuming, you may want to consider selling handmade soaps on your own website. This will greatly reduce your cost of advertising, since you can get listed in Google and promote on your social media profiles for free! You can reach more people, 24 hours a day, anywhere in the country.
This also means that your soap business profit margin is going to be larger, because your cost of doing business is going to shrink.
If you decide to do that, you'll need to either pay listing fees for sites like Amazon/Etsy, or hosting fees if you decide to sell soaps on your own website. You could choose an “done for you” ecommerce setup like with Shopify, or you could do a self-hosted WordPress blog (just install WooCommerce).
Personally, I like the idea of selling online because inexperience sellers can make a smoother transition into the business world. I know from my own experience as an affiliate marketer, I didn't know anything when I started, and gradually learned as I went.
Since my business was my website, all I had to do was update the content, and then I was up to date. It was free working for myself. I could watch a YouTube tutorial, and implement changes in real time.
With a physical business, let's say you print a banner for your stand, but then it doesn't work for some reason. Now you have to pay to print a new banner, and you have to wait until the printing company sends the banner to use it. Plus, all your mistakes are there for the world to see, and local folks are the ones you see week after week. In the only world, you have the advantage of anonymity so you feel less pressure.
Post an ugly picture and get negative comments? Delete it, start over, and nobody remembers!
What About Licensing, Laws, & Insurance?
As has been made abundantly clear in the comment section, there's more to selling soap than just making it and putting it on Instagram. We live in a litigious world, and a single asshole can seriously f-up your life.
Another great example. Same guy who had the brewery I mentioned above.
I wrote this original post in 2015. As of 2020, he's no longer involved in the brewery. I don't know all the details, but a former employee sued him for a workplace injury. It was eventually dismissed as a frivolous lawsuit, but the lawyer fees bankrupt him and he had to sell the business.
ONE GUY SUED HIM.
You may think that selling soap isn't a big deal, but picture one person getting a rash from your soap formula, and now envision them trying to sue you for a million dollars.
This is a good reason to get insurance, but it's also a good reason why you want to really think about how deep you want to go into soap selling. If you're selling online and trying to go full time, then you need to get your proper local licensing and insurance set up before you start selling.
What About Starting A Soap “Business”?
Technically, you don't have to form a “business” in order to sell handmade stuff. As long as you're paying your local, state, and federal taxes and following the laws, your business could just be you, and you'll just pay your taxes as regular income (disclaimer, not a lawyer, CPA, etc qualifications to make this statement).
However, starting a business entity is still a good idea because it protects you from liability issues, and it also makes it easier to manage your money within the business without mixing it up too much with your personal finances.
It's one thing for your business to go bankrupt. It's another for you to get a 2nd mortgage on your house to fund your soap making business.
Selling Handmade Items Through Affiliate Marketing
Like I often do when researching a new post, I became really interested in soap making! It looks like it could be a lot of fun, and creative sellers seem to make lots of cool and unique products. It could be an awesome side project, or fun hobby-business to keep you busy and make a bit of cash on the side.
But if you want to make money selling homemade soaps, there's a lot more to consider than just the creative side of things! When you factor in the costs for the equipment needed to produce, package, store and ship large amounts of soap I think most soapers are probably spending more than they make. Those that make good money, usually have a wider variety of products available.
However, there is still a way to be involved with homemade soaps and make money without need a ton of time and money. You could simply become an affiliate for Etsy, as well as any other marketplaces similar to it.
Etsy pays its affiliates 4% of everything they help sell. Amazon’s affiliate program pays out about the same amount, 4%, up to 15%. With other affiliate programs you may be able to earn up to 75% of the sale price, depending on what you're promoting.
With an affiliate website, you can promote a wide variety of products and services to your audience, depending on the topic of your site. For example, rather than promote just “soap”, you could promote all types of handmade crafts, or maybe something like natural cosmetics.
The advantage of affiliate marketing is that you don't have to make any products. You promote other people's products as a freelance advertiser, then get paid for each sale you make. This way, rather than being limited by your current skills for product creation, you can leverage other people's skills, and sell pretty much anything you can find online.
In other words, you don't have to make the soap. You can just sell it. No production. No shipping. No returns. No customer service.
In fact, I started my first affiliate website without a business name, without a business license, and without a clue. You don't need anyone's permission to start a website and review products!