How to Start an Organic Soap Making Business? [A Profitable Buisness]

What is a better hobby than soap-making? It’s creative, rewarding and fun! You can experiment with different ingredients you have at home and share your handiwork with colleagues, friends and family. Soap making is not just a creative pastime but can bring in good bucks when done right. Yes, you can sell your products and build a profitable organic product business as a soap artisan.

Today, several people are moving away from commercially sold soaps due to chemicals, additives, and harmful environmental impacts. Households across the country are swapping their commercial bar of soap with a natural handmade one. This has led to the demand for organic soap.

Just like any other small-scale business, soap making has the potential to provide huge returns provided you’re ready to invest patience, determination and perseverance. With the right organic products business plan, you can handcraft soaps that your customers will love and choose.

This article will brief you on how you can start an organic soap business from scratch. Grab a note and pen, get ready to jot down your ideas as you read this guide on how to convert your passion for soap making into a profitable organic products business.

Complete Guide to Starting an Organic Soap Business

#1: Learn How to Make Organic Soap – Experiment & Get Creative

The first step to setting up an organic soap business is to learn how to make soaps. Even if you have never made a bar of soap before, no worries! There are plenty of detailed online tutorials, courses and books to help you master the art of soap making at home. Many of these resources are free, so you don’t have to worry about investing in an expensive soap making class.

• Learn how to make soap with natural ingredients. Avoid using additives and other harmful chemicals if you’re looking to establish your brand as an organic products business.
• Choose which type of soap you want to create. Organic soaps are made in three ways:
• Hot process
• Melt and pour
• Cold process

These three methods have their advantages. Determine which works best for you and opt for that process.

• You may not  get it perfect in the first few attempts. No worries, keep on repeating till you’re able to create amazing-smelling soaps in beautiful colours and designs.
• Make different batches and keep detailed records of the output of each set. This helps you perfect your skills and recipes.

Spend some time perfecting your soap making recipe to get it perfect. Try different essential oils, fragrances, cleaning agents to get the right balance of cleansing, hardness, moisturisation, lather and scent.

#2: Identify your USP

Organic products manufacturing has grown by leaps and bounds in the last couple of years. So, to make your brand stand out in the market, you need to identify your USP. The USP (Unique Selling Proposition) is what makes your brand different from competitors.

Here are a few tips to help you nail your USP:

• Decide your niche – Who is your target market? Will you specialise in a particular type of soap-like newborn soaps? Do you plan to sell exclusively to individual customers? Or do you plan to sell organic products wholesale to hotels, cafes, spas, etc.?
• Write down your short-term and long-term plans - Envision where you want to take your brand a few years down the line. Don’t be shy. Write down your goals and objectives for your brand. It may seem like a tall order, but only when you have a particular purpose, you can devise the right plan to achieve it.

As your organic products business grows, you can tweak and revise your goals and niche to meet your customers’ needs and the market.

Also read: Soap Manufacturers In India

#3: Setting up the Location for your Organic Soap Business

Generally, most organic products business owners start from their home/garage and move to bigger office space as their business grows. There are both pros and cons to this strategy. Setting up your organic soap business from home will cut down on initial investment costs, but it can be challenging to scale your business down the line.

Irrespective of whether you’re running the business from your home or a dedicated space, here are a few tips to keep in mind:

• Set up a work area – this is the production space where you’ll make soaps, test out new recipes, allow soaps to cure, etc.
• Set up an inventory storage area – this is the space where you’ll store raw materials, equipment, packaging materials, etc.
• Shelves for the prepared soaps – this needs to have sufficient air-flow so that the prepared organic soaps can dry and cure safely, away from the reach of kids and pets.
• You’ll also need an administrative area – a table and chair to process orders, handle customer queries, process payments, etc.

It’s good to keep the administrative space separate from the production space to avoid clutters and messes. It also makes you feel professional and organised.

Also Read: Best Shampoo Brands in India

#4: Identify Suppliers and Find the Right Supplies

Soap making supplies can be classified into two categories:

• One-time purchases – this includes mixing bowls, spatulas, moulds, jugs, etc.
• Recurring purchases – like lye, shea/cocoa butter, fragrances, essential oils, glycerine, beeswax, etc.
• Packaging purchases – Packaging is as important as soap. The right packaging can elevate the appeal of your soaps and entice customers to make the purchase. There are many packaging choices – twine, burlap, cardboard, butter paper, fabric, etc. So, while identifying suppliers, look for the right organic products packaging suppliers.

During the recipe testing process, identify which ingredients give you the best results. Once you have figured it out, look for suppliers who sell it to you at the most cost-effective prices.

#5: Finally, Spread the Word with the Right Promotion Strategies

Manufacturing soaps are just the start. Only 20% of your time will be spent on making soaps. You will spend the remaining time on marketing, promotions, and other administrative tasks. To run a profitable organic products business, you need to focus on brand building. Here are a few tips to help nail the promotions:

• A robust social media presence is a must – today, social media is not just about likes and shares but a hot business market. You can build your audience and brand following by promoting your products on various social networks like Instagram and Facebook. Since soaps are visual products, try Pinterest as well. Having a strong presence for your business on social media can help you reach out to your target audience and start selling.
• Learn the basics of good product photography – take clear, well-lit pictures. A good photograph is a must for promoting your brand online. If photography isn’t your forte, you can hire professional product photographers. Remember, this isn’t an expense but an investment for your organic products business.
• Consider investing in an organic products website. Having a professional website makes your brand feel professional. Additionally, with the right SEO and content marketing, your website can increase your online visibility.
• Try starting a YouTube channel for your business. Use your channel to build your brand reputation – instead of just selling via YouTube, post-how-to-videos, tutorials and other informative stuff to establish your brand’s trust and authority in the niche.
• Decide all the channels you want to sell your product – Amazon, Etsy, Instagram, Facebook, etc. Besides online selling, you can also visit local fairs, trade shows, etc., to promote your brand locally.

Wrapping Up

The organic beauty and personal care industry in India has grown exponentially in the last few years. With increasing awareness of commercially produced beauty products’ harmful side-effects, more and more individuals are switching to organic products.

There is stiff competition in the market with dozens and dozens of organic soap makers. So, if you’re looking to stand out, you cannot just compete on price alone. Aiming to sell the lowest priced product in the market leaves no space for enough profits. Instead, focus on delivering high-quality niche products that will leave your customers to keep coming back for more.

Before we leave, here are a few words of advice to build and grow your business:

• Never stop learning
• Be passionate about your product
• Focus on your niche and keep innovating

With the right planning and promotion, you can transform your soap making hobby into a profitable business venture.

Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more!
Download OkCredit now & get rid of your bookkeeping hassles.
OkCredit is 100% Made in India.

FAQs

Q. Do I need to hire staff for my organic soap making business?

Ans. It all depends on the nature and scale of your business. Yes, it’s possible to run the company as a one-woman (or one-man) show. However, as your business grows, you’ll need to take on support staff for packaging, clean-up, order processing, marketing, sales, etc.

Q. How can I manage the accounts of my organic products business?

Ans. Check out OkCredit – a handy mobile app to keep track of all your receivables and payables. Multi-language support, collection reminders, reports and account statements - it’s the easiest and most convenient way to maintain the accounts of your organic products business.

Q. What should I name my organic soap business?

Ans. Look for a brand name that is unique, not taken and catch. That’s easier said than done. Brainstorm with friends and family, ask for suggestions, and pick one that reflects your brand niche and USP. Keep in mind that in the future, you may expand your business to include other organic products like lip balms, scented candles, bath bombs, natural fragrances, shampoos, conditioners, etc. Instead of restricting the name to soaps, look for broad ones that signify the overall category.

Q. How much does it cost to set-up an organic soap making business in India?

Ans. Unlike other organic products businesses, setting up an organic soap making unit doesn’t require much investment. You can easily set-up one with an initial investment of Rs. 75,000 – Rs. 1 lakh. The various major costs include:

• Soap making course - Ranges from Rs. 2000 to Rs. 10,000.
• Initial investments like soap making equipment, moulds, mixers and blenders, pigments, and essential oils cost around Rs. 10,000 to Rs. 15,000.
• Professional Website – development costs range from Rs. 25,000 – Rs. 30,000.
• Marketing campaigns by a professional marketing agency – ranges from Rs. 10,000 – Rs. 15,000.
• Office space rental, hiring help staff, utility bills, logo design, packaging, flyers, promotional materials and other miscellaneous costs – Ranges from Rs. 25,000 to Rs. 50,000.

Q. How to decide the pricing of my soaps?

Ans. To decide the selling price of a bar of organic soap, consider:

• Cost of ingredients
• Labour costs
• Licensing costs
• Rent, electricity bills of the office space
• Marketing costs
• Salary of the entrepreneur (yes, calculate your salary) and remuneration of employees
• Utility bills
• Packaging, shipping, labels
• Marketing costs, etc.

Most artisanal soaps range from Rs. 200 upwards.

Q. Do I need any licenses to sell handmade soaps in India?

Ans. As per the Drugs and Cosmetics Act, the rules for manufacturing and selling cosmetics like soaps vary from one state to another. So, the required organic products certification and licenses will depend on where you live. Here are some standard permits needed:

• Application Form 31 to obtain a manufacturing license. Criteria to get the manufacturing license:
• Any person manufacturing soap (or a team member) should have passed the intermediate exam from an authorised board with Chemistry as one of the main subjects.
• Diploma in Pharmacy, issued by the Pharmacy Council of India
• Schedule M-II for cosmetics license.