This is the best time to learn how to start a soap making business with nearly nothing.
While people have been making and selling soaps from their homes for a while, the past few years have been insane with all sorts of new DTC brands popping up left and right. Best of all, all signs point to the industry continuing to grow.
So there’s a huge opportunity for anyone who wants to be in.
In fact, it’s one if best garage business ideas.
But, if you’re trying to learn how to start a soap making business with nearly nothing, then you have to come at it from a slightly different angle. And that’s what we’re going to cover today.
Let’s talk about it…
Is A Soap Making Business Profitable?
Ask me a few years ago if a soap making business can be profitable and I would have chuckled. But that was mostly because I didn’t know anything about soaps. I assumed they were a cheap, low margin business that could be tacked on a profitable business model, but could never be standalone. I was wrong.
The soap making business is, in fact, very profitable.
This is assuming you’re building a premium priced soap brand. The type where you sell organic, handmade, cold pressed soaps that can be sold for at least $9.95 per bar. In a perfect world, you’re also making the soap yourself, which will cut costs drastically.
Both are key to a soap businesses profit margin.
It’s also the only way I know how to start a soap making business with nearly nothing.
Otherwise, you’ll need thousands of dollars to start one due to inventory costs. With that said, if you did have the money for inventory, it can still be profitable depending on your pricing and inventory costs. But for the purpose of this article, you want to bring manufacturing in-house.
It’s also a great social entrepreneurship idea due to being all natural, so that’s a double win.
How To Come Up With Soap Making Business Ideas
You can’t just say you’re going to make and sell soap and expect it to be successful.
You need to come up with a solid soap making business idea that is differentiated enough to support a premium price and would lower your CAC enough to work with paid advertising. Ideally, it’s also a blue ocean market that helps you avoid directly competing with huge brands.
This comes down to figuring out what attribute you want to own.
The 4 most important things people care about when buying soap?
And within each attribute, there are more attributes. For example, you can make soap for oily skin or you can make soap for dry skin.
What you want to do from here is name your top 10 direct competitors and place them on each attribute. For example, Dr. Squatch would probably take the “woodsy” scent attribute. Once you’re done, you’ll literally be able to see the whitespaces in the soap market.
Each whitespace is a soap making business idea you can start from home.
The key here is accuracy.
Just because you see another brand focused on an attribute, it doesn’t necessarily mean it’s taken. It’s only taken if it’s a brand with a lot of awareness. For our purposes, I would say this means any brand that is making 8 figures or more. It also needs to be at least 2 brands before you let it go, because results don’t drop until after that.
Once you find your whitespace, you want to go all in on it.
How To Come Up With Soap Making Business Names
Despite what most people say, when learning how to start a soap making business with nearly nothing, the name you pick is extremely important. Not only do they help solidify your positioning and can actually help drive word of mouth, but they’ll also motivate you to keep on truckin when things are getting hard. The latter is probably even more important than the former.
Here’s the best part… you’re already halfway through the process.
Once you’ve identified your soap making business idea, all you have to do now is essentially find a cool word or phrase that acts as a metaphor to your unique selling proposition.
Let’s use Dr. Squatch as an example.
They focus on “outdoor” scents, especially things like pine. So they picked Dr. Squatch because it combines the health element of doctors with the outdoors reference of sasquatches.
So here’s how the process will look like for you…
1/ Identify your USP
2/ Brainstorm your brand identity
3/ Create a list of 10-20 seed keywords
4/ Google those words
5/ Look for awesome phrases
6/ Support your search with media
So let’s say I’m starting a men’s soap brand that specializes in bourbon scents. I want it to have a “friends out at the pub” feel. A few of the seed keywords will be words such as keg, beer, bourbon, pub, and more. Basically, anything related to the environment. I would then type these words into Wordhippo and spend hours going down the rabbit hole.
In addition to Wordhippo, I would be Googling for any type of movie, video game, show, or any other form of media and entertainment that’s related. Look through their wikipedias and read every single word to find any cool phrases that reflect what I’m trying to do.
Most importantly though, I wouldn’t want to stay stuck with one perspective.
The key would be to use one type of word to find the next type of word. Maybe look for different angles or focus on different elements. Anything to broaden the potential type of keywords that would fit my overall concept. It doesn’t have to be just pub related.
For example, if you’re marketing to hispanics, you would want to tie in hispanic culture somewhere.
The Ultimate Soap Making Business Plan
At this point, you have a differentiated soap brand that is ready to be sold. Great. Here’s how I would go about launching your brand with nearly nothing…
1/ Produce your “hero” soap
The coolest part about learning how to start a soap making business with nearly nothing is realizing is that making soap is cheap. You can make your first batch of soap for less than $100. And since you’re making it yourself, you’ll also end up with a great profit margin.
So take this time to make your “flagship” soap. Don’t worry about all the bells and whistles. Just worry about making great soap that feels, smells, and lathers exactly as you want it to. You don’t need a massive batch either. In fact, 12 bars are more than enough to move on to the next step.
2/ Build a small, loyal audience
Before you start spending money on ads, I recommend you start by building an organic audience. This way, you’re not spending any money to sell your product like you would be with Facebook ads. So your first move is to create content.
This can be a blog that reviews soaps and other toiletries. You can try Youtube for men’s style advice. Even funny TikTok videos that revolve around soap can work. Either way you go, you want to give yourself at least 6 months to do it right. After the first 4 months, you also want to start a pre-launch email list and send your audience to that.
3/ Pre-sell your hero product
The problem isn’t that you have nearly nothing to spend on making soap. The problem is that you don’t have the cash at hand right now, yet. The solution then is to use your customer’s money to fund all of your inventory needs. You do this by pre-selling your product.
The most popular way to get this done is with a Kickstarter. So take your soaps and take images and videos for all of your landing pages and marketing materials. Then, send your email subscribers to buy your product. If you’re selling something your audience wants and it’s a big enough audience, you’ll make enough money to continue making more soaps.
4/ Focus on growing with Amazon FBA
Normally, I like to wait to use Amazon FBA for later. But since we’re trying to launch this brand with as little time, money, and resources as possible, it’s worth going straight to Amazon FBA as soon as possible. Mostly because you already have an audience to market too.
So once you have inventory again, set up your Amazon listing. Then send traffic to it by continuing to grow your audience and sending them to your listing. Make sure to use Amazon SEO because that’s what will lead to compounding growth.
5/ Launch additional products
At this point, you’re making money. All that’s left now is to maximize what you’re already doing by launching multiple products. This can mean multiple scents or soap for multiple skin types or more. In fact, you can even look at other products you can make at home. In all cases though, you want to leverage your audience and Amazon as much as possible.
At the same time, this is when you can start thinking about investing in new things. For example, you can take Amazon a step further by using Amazon PPC, you can look for help when it comes to manufacturing your soaps, you can invest in writers for your blog, and you can even look to start your own branded Shopify store with Klaviyo to start doing things like cart abandonment. Basically, reinvest your profits to grow the business!
Soap Making Business Success Story: iHeart Nature
If you want to learn how to start a soap making business with nearly nothing, iHeart Nature is a great example to follow.
It was founded a few years ago by an ER physician and his family. They got an idea to make all natural soap, which was more novel back then than it is today. So they hired a manufacturer to make their batches and they put them up on Amazon. Then, by doing everything they can to rank for their keywords, they made tons of sales. Along the way, they expanded to sell more products and even launched their own branded Shopify store. Today, they generate 7 figures in yearly revenue from all of their marketing channels.
You can do the same for your soap business.
The main difference between iHeart Nature and your soap business is that the soap market is more saturated than it was back then. Hence why it’s important you go through the 1st exercise in this article about finding the attribute you want to own. It’s also super important that you make the soap yourself and you build a small, loyal audience to market too.
Doing this will give you the ability to do what they did.
Soap Making Business Insurance
Soap is amazing, but because it comes in contact with your skin, it can be a liability. So even if you do everything possible to make a great product, it’s still a good idea to get insurance because you never know when something bad can happen.
The best provider?
I would recommend the Handcrafted Soapmakers Guild.
They have a group policy for handcrafted soap and toiletry makers. They have a lower cost coverage option that is $265. They also have a “full coverage” option that is $375. In both cases, you have liability coverage up to $2,000,000.
If you must, make a few sales first to raise that money.
But if you can get it from the get go and have it not affect your business economics, then it’s a good idea to get it as soon as possible. Particularly if you’re making the soaps yourself.