Want to learn how to start a soap making business? This guide shows you what you need to know before selling your soap.
So you’re ready to start a soap making business! You’re eager to jump in, set up shop (or a craft fair table, most likely) and start selling soap to your future customers.
But make no mistake, my friend. Starting a soap making business, whether you want a side hustle to bring in a few extra bucks, or a full-fledged income to replace your full time job is a lot of work.
Before you make that first sale, there are steps you must take to ensure you’re selling legally, and protecting yourself and your customers.
Before we get down into the nitty gritty details, though, I need to make clear a few things:
- The info I’m sharing applies to those in the US only. Each country and territory has different rules regarding selling handmade soap. While you may still find some good info here if you are in a country other than the US, know that your rules will be different. Check your local jurisdictions to find out what they are.
- Each state, county, and city within the US has its own specific regulations for starting a business selling handmade soap and cosmetics. Depending on where you live, certain licenses and permits may or may not be needed. Some states have very strict regulations for selling soap and cosmetic products (I’m looking at you, California and Florida.) So be sure to check your state and local rules to those laid out here.
- I am not a lawyer, accountant, CPA, FDA compliance expert, butcher, baker, or candlestick maker. Please do not take what I say here as gospel. Instead, use it as a jumping-off point to do your own research. While I will do my level best to get you moving in the right direction, you ultimately are responsible for ensuring that you and your budding business comply with all necessary rules and regulations before you start selling.
Have an Amazing Soap Formulation
Let’s start at the ground level. The first thing you need before you start selling soap is a great soap formula. One you have tried multiple times so that you know how this formula behaves inside and out: from pot, to cure, to showertime.
Your first batch is NOT the batch you slap a label on to sell. Yes, those first batches of product are exciting and magical. You are so in love with your product you can’t wait to get them into as many hands as possible.
Before you start selling, though, you need time to try out the soap and thoroughly get to know it.
How does it lather? Is it too drying? How long does it last? Does it feel slimy or turn to mush after a few uses?
Try out that formula with different fragrances, essential oils, and other additives to see how it behaves.
Get other’s honest opinions of your finished soap. If you think it is the bee’s knees but if everyone else is saying they wished it lathered more, or lasted longer in the shower, listen to that and tweak your formulation until it’s perfect. Remember, you aren’t selling to you, you’re selling to others. So take into account any common suggestions being made.
If you want to set yourself up for success and repeat happy customers, your soap has to be top-notch. Because, let’s face it, there is a lot of mediocre soap out there and today’s customers are quite savvy.
Just having a handmade product isn’t enough anymore. It has to be a great handmade product, one that people are willing to pay for.
Test Your Formula
Creating an awesome formula is just step one. You then must test your formula to ensure you can (1) recreate it consistently and (2) see how your product behaves during use and storage.
Here in the US, there is no requirement for 3rd party testing of soap and skin care products made by small, independent handcrafters. (Again, other countries have different requirements so please check the laws where you live.)
You may have your products challenge tested and microbial tested in a lab if you choose, but this is incredibly pricey and likely out of reach for most handcrafters. So that means the onus to test your products falls on you.
Don’t ever sell a bar or skin care product you haven’t fully tried out and tested yourself. Again, that means your shouldn’t sell of your very first batch.
If you sell without trying and testing out your own product, how would you know that beautiful bath bomb stains the tub? Or your lip balm melts in pockets? Or your lotion’s preservation system isn’t up to par and is growing mold after a week?
You should be able to answer every one of these questions before you start selling a product:
- How long does your product last? AKA approximately how many uses can your customer expect from the product? For example, the jar of lotion lasts about a month with daily use. The sugar scrub has 4 uses.
- What is the shelf life of your product? Make it up and let it set forever. See what happens at 6 weeks out, 6 months out, 18 months out. Does the soap turn brown after 3 months? Does your bath bomb still fizz after 12 months stored on the shelf? Does your lotion grow mold after 4 months?
- How stable is your product? Are you getting separation, sweating, graininess, color morphing, fragrance fading, DOS (dreaded orange spots) on soap, or any other changes over the course of normal shelf life? Does your product stain washcloths, tub, or skin (yikes! Let’s hope not!) If you sell your product from first batch, you’ll never know.
- How sensitive is your product to temperature fluctuations? Does your product melt in the heat? Does it solidify in the cold? Does it change consistency in any way? For example, know what your lip balm does when kept in a pocket for several hours. Or what your sugar scrub does when stored in a cold cabinet under the bathroom sink. (I’ve had scrubs go rock hard when temps got below 72 degrees. So even slight temperature variations can have big impacts on certain formulations.)
- How does it hold up in normal, and not so normal, conditions? Store it in a hot car in the summertime, and a freezing shed in the wintertime. Stick dirty fingers in the lotion, run the lip balm through the washer and dryer, let your bath salts sit in a humid bathroom with the lid off. Get creative, because I assure you your customers will be very creative in how they use and store your product once it leaves your hands.
You should also test any cosmetic products for pH and microbial growth. This doesn’t apply to soap, but is a good idea for lotions, creams, and facial toners. You can buy pH strips/probes and at-home microbial test kits at cosmetic supply companies like Lotion Crafter and Making Cosmetics.
You should know your product intimately, inside and out, before selling to the public.
Know The Rules and Regulations
Soap and cosmetics are regulated by the US Food and Drug Administration (FDA).
As a small cosmetic manufacturer, which the FDA define as having less than 1 million dollars gross sales annually, you are exempt from certain aspects of the recently passed Modernization of Cosmetic Regulation Act (MoCRA). For example, you won’t need to register your products with the FDA or have your facilities inspected.
But the FDA has still has specific rules that must be followed in order for you to stay compliant (in other words, to sell your soap and handmade skin care legally.)
Further Reading: HSCG MoCRA Rescource Center
Do You Need FDA Approval To Sell Soap?
The short answer is no, you do not need FDA approval to sell soap. The FDA does not provide approval or licensing to soap or cosmetic crafters.
While you don’t need FDA approval to sell soap and cosmetics, you are still responsible for selling safe products to the public. You will be held liable if your products are not formulated properly, contain ingredients that are not deemed skin safe, contain ingredients that the FDA does not approve in the application you are using them in, or are contaminated with bacteria, mold, etc.
Further Reading: Small Business and Homemade Cosmetics FDA Fact Sheet
Good Manufacturing Practices (GMP)
First and foremost, you must follow good manufacturing practices, or GMP. Good manufacturing practices mean you must craft your products in a sanitary way, to prevent them from becoming contaminated.
While you can make soap and cosmetics for retail sale in your home kitchen (many soap makers start off this way, after all) it’s doubly important to ensure that you aren’t cross-contaminating your cosmetics with your meals.
- Have different tools for cosmetic making than for cooking.
- Thoroughly clean and disinfect all surfaces before crafting.
- Keep pets, kids, and hungry snack makers out of your workspace while crafting.
- Wear gloves, a lab coat, and hair nets.
If you are serious about starting a soap making business, having a dedicated studio is the best option. This could be a separate room in your home, a converted shed in your yard, or renting a commercial space for your retail crafting. It will be money well spent on productivity.
Further Reading: FDA Guidance for Cosmetic Good Manufacturing Practices
Cosmetic Claims Vs Drug Claims
Did you know there are certain things that you legally cannot say about your handmade soap and cosmetic products?
You can only make cosmetic claims about your products. So you can say your product moisturizes, or softens, or cleanses, or exfoliates.
You can’t say your product ‘treats’ any condition, nor can you say your product is ‘good’ for any medical condition including acne, eczema, psoriasis, wounds, etc.
These are considered drug claims. You are making cosmetics; you legally can’t make any drug claims about your product.
So, let’s take a look at the differences:
✅Cosmetic claim: This soap cleanses and leaves your skin feeling fresh.
❌ Drug claim: This soap gets rid of acne.
✅Cosmetic claim: This cream is rich and moisturizing.
❌ Drug claim: This cream is good for eczema.
✅Cosmetic claim: My customers tell me the soap improved their skin’s softness and texture.
❌ Drug claim: My customers tell me the soap improved their psoriasis.
Yes, I know lots of soap makers make these claims. Yes, your products very well may be good for these conditions. No, you still can’t legally claim they are.
In fact, you can’t even talk about an ingredient in your product being good for any medical condition (i.e. you can’t say ‘oatmeal is good for rashes’ while selling an oatmeal bath soak.)
You have to be very careful about what you say about your products. The FDA is picky about this. I know soap makers who got a knock on the door from the FDA because they mistakenly made drug claims regarding their products.
Further Reading: FDA Guidance – Is It a Cosmetic, a Drug, or Both (Or Is It Soap?)
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Labeling Requirements
Besides all of the above, the FDA also has very specific labeling requirements that must be met by all crafters, even those who are making small batches of soap out of their home kitchens.
Some info that must be on your label (but not an exhaustive list of labeling requirements by any means):
- Product name
- Declaration of ingredients, listed in order from most predominate to least
- Business name AND address
- Batch or lot number
- Directions and warnings
- Net contents of package (i.e. weight of soap, volume of lotion, etc.)
The font styles, size, and weight must also follow certain rules, as well as where the information is placed on the label.
The exception here is soap. The FDA has no labeling requirements for soap as long you make no cosmetic claims for your soap. This means you can’t say your soap is moisturizing, or non-drying, or makes your skin smell good. All you can say is ‘This is soap. It cleans.’ End of story.
This is why most soap makers choose to label their soap as a cosmetic. It gives you much more leeway in what you can say about your lovely creation–and how you can market it to your customers.
As a side note, melt and pour soap is always considered a cosmetic by the FDA and must be labeled as such.
If labeling requirements make your head spin (honestly, same) I highly recommend you grab a copy of Marie Gale’s Soap and Cosmetic Labeling or Navigating the Rules and Regs: A Practical Guide for Soap and Cosmetic Handcrafters. Both will give you labeling requirements in plain English.
Further Reading: FDA Summary of Cosmetic Labeling Requirements
Get Your Business Paperwork In Order
OK, now that we’ve got the federal regulations taken care of, let’s look at what types of licenses and permits you’ll need at the local level.
What you need to legal operate a home-based or small business completely depends on the rules of your state, county, and/or city. But here’s a general list of what may be required:
- Business license
- Assumed business name/doing business as (DBA) filing
- State registration
- Seller’s permit/sales tax permit
Wait a second, Angela! You’re likely saying now. I just want to set up a craft table at my local church bazaar or neighborhood holiday craft fair. Do I still need all of this paperwork?
This truly depends on your jurisdiction and their rules and regs. Some city/counties/parishes allow for limited selling a few times a year and treat this as they would garage sales, or selling occasional items here and there on Craigslist or FB Marketplace.
Other localities require you to get a temporary seller’s permit and collect and remit taxes on your sales.
If you are going to be selling to the public, even if it’s just a few bars here and there, you’ll likely need some licenses/permits to make your small biz or side hustle legal.
Contact your city (or county) clerk or recorder’s office to ask what is needed in your area. They can point you in the right direction.
Insurance
Insurance is not a requirement legally, but is strongly recommended. Insurance helps protect you and your business.
If a customer has a reaction to your product, you could be held liable. And let’s face it, we live in a litigious society.
Here’s something a mentor of mine told me decades ago, and it has always stuck with me: Your product doesn’t need to be the cause of the reaction, so long as the customer thinks it was.
In other words, the customer doesn’t need to prove it was your product that caused the adverse reaction.
And maybe your customer would never dream of suing under normal circumstances. But if she just lost her job and health insurance, and now is faced with a doctor visit and cost of prescription medication, she may be stuck between a rock and a tough spot. And your business could be left holding the bag.
Is insurance expensive? Yes, it’s a yearly investment. But it’s not nearly as expensive as a lawsuit.
Several places offer insurance to small soap makers, but the most cost-effective will be to join a professional organization to take advantage of lower group rates.
The Handcrafted Soap and Cosmetic Guild and the Indie Business Network both offer insurance to members.
But I Just Want To Sell at a Small Craft Fair!
I know all of these rules and requirements are overwhelming. Especially if you just want to sell at a local craft fair a couple times a year!
Here’s the hard truth, my friend. If you just want to sell at a holiday craft fair at church once a year, soap and handmade cosmetics are probably NOT the best products to peddle. I know I’m breaking hearts wide open, but the truth is that there are a lot of requirements to legally sell handmade cosmetics.
For the occasional craft fair, a craft with less cumbersome regulations is a better choice. Consider knitting hats, making jewelry, pottery, handpainted greeting cards… basically anything besides cosmetics (or anything edible; the cottage food industry has a lot of requirements as well.)
But if you’re determined to start a soap making business, don’t let fear or overwhelm hold you back. You can do it, my friend. Just take it step by step.
While I can set you down a quick road map, my business model is not teaching people the ins and outs of starting a soap business from scratch (my heart is for working with beginners.)
But I happen to know someone who is amaze-balls at creating savvy soap making entrepreneurs. So, if you’re ready to get serious about starting a soap making business, I will lovingly pass you over to Kenna at Modern Soapmaking. I highly recommend her Soapmaker To Moneymaker program (and I’m not an affiliate or anything, I just think it’s one of the best out there.)
Good luck with your new venture, my friend! Know that I am always rooting for you. Make sure you keep in touch too, by signing up for my newsletter, and let me know how your business is going.
