Home Based Soap Business
Making and selling handmade soap from home
A home based soap business making and selling handmade soap can be a fun and profitable way of making money from home and the demand for natural body care products
has soared in recent years.
An essential element of a succesful soap business is to get the pricing right. Once you have perfected
making quality homemade soap you are ready to start
marketing and selling your soap. Find out how to properly price your handmade soaps and make sure you are on the road to profit and success!
- Research the competition. Get a price range for your homemade soap by finding out what the prices are for similar products
in your target market or area. Go to local stores that stock handmade soaps and check the prices. Visit craft fairs and farmers markets, see what types of
homemade soaps are popular and the prices they go for. Go online and research prices for handmade soaps. This will give you a sales price range
from highest to lowest dollar amount that you can use as a guideline for your home based soap business.
- Consider your soap business overheads. You need to include the cost of the
overheads involved in making and selling soap at home such as electricity, water, phone and internet costs. Include any advertising and marketing costs such as business cards
and brochures. Work out the approximate monthly costs of these overheads and write down the figure. Include a percentage of this figure in the cost of each soap bar.
- Your equipment start-up costs. List the equipment you bought for your home based soap business. Include pans, spoons, blender, molds etc. Add up these costs and
work out how to amortize the costs over a fixed period. For example if you spent $240 on equipment and you decide to amortize or write off these costs
over a two year period you will need to include $10 per month in your sales prices.
- Your ingredient costs. Add up the costs per pound of soap. For melt and pour soap include the cost of the soap base and fragrance and color costs. For cold process method soaps
include the cost of the oils and fats, lye and distilled water plus fragrances, colors and any other additives. Weigh the soap bar and work out the cost as a percentage of the cost per pound of handmade soap.
- Your labor costs. This is where you look at the profit you expect to make with your home based soap business - the cost of your time and labor. Work out how much you should pay yourself per hour. When working out your time
per batch of soap remember to include time spent designing the soap, sourcing and purchasing soap supplies, marketing and selling the soap and travelling time as well
as the actual time spent making the soap.
- Your packaging costs. Include your costs for wrapping and packaging each soap.
If you find the costs of the soap are too high to make a decent profit and remain competitive review your soap supplies. Are you getting the best prices? Buying in
bulk is usually more cost-effective. Review the quantity of soap you produce per batch. Doubling the amount of soap you make in each batch does not mean doubling the time spent making it, it usually only takes a little
more time to make more soap per batch.
Starting a home based soap business is simple. Building it and making it successful takes some thought, planning and hard work. However you decide to market and sell your homemade soaps it is essential
to have set the right price.
Turn a fun and creative hobby making soap at home into a successful home business.
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