We spent hours collecting data from small-scale soap retailers on Esty, Google, Youtube and Facebook Marketplace so we could answer the question once and for all: is selling soap profitable? We wanted to find out exactly how much vendors were selling their products for, and how they were marketing their small businesses to achieve success! By estimating the cost of materials, and researching retail/sale prices, we were able to determine the average profit margin for soap products.
Selling soap can be extremely lucrative, with profit margins ranging between 150% on the low end to 525% on the high end. While these margins do not include packing or shipping costs, these costs can be passed onto the customer.
Soap making is a relatively straightforward process; and doesn’t actuslly take a lot of time, effort, or materials to set up. In fact, it’s a business you can run from your kitchen and teach yourself in an afternoon!
Like many of the side hustles mentioned here, the success of your business ultimately depends on ow well you market it (along with finding an underserved target market). We recommend checking out our small business marketing tips before jumping head first into any new business venture!
Related Reading: How to Design A Logo For Your Small Business Using Canva
Jump To:
Business Models
When it comes to selling soaps, there are two main “business models” that you can pursue. One involves making the sop by hand, while the other involves buying it in bulk and reselling it for a higher cost. While both are equally valid, you’ll have more control over the quality of the product if you make it yourself. We’ll dive into the pros and cons of each method below:
Handmade
Hand-making soap and bath products is by far the most profitable (and fun!) way to make money selling soap. While it certainly requires more time and effort than on selling pre-made products, it also has the most significant profit margins. There is also something to be said about crafting your own products!
There are hundreds of different kinds of soaps you can make from home: from cold press soaps, through to bath bombs and liquid soaps. All you really need to get started are a few basic ingredients (many of which you can source from the grocery store), or a melt-and-pour soap base!
We personally recommend starting with soap bars, and working your way up. As, they tend to be easier to make than liquid products and sell better at farmers’ markets. However, you can really make and sell any kind of soap you like!
Pros & Cons of Selling Handmade Soap
| Pros | Cons |
|---|---|
| Can control the quality of the product | Soap requires time to cure before shipping |
| Don’t need to hold large amounts of soap | Requires your time/labor |
| Can offer custom orders | Variations in quality or recipes / You can make a bad batch |
| Low start-up costs | |
| Low cost of materials (per bar) | |
| Better profit margins than on selling |
On Selling (From Wholesale)
The second business model involves buying soap in wholesale quantities and then re-selling for a profit. Sometimes this involves re-packaging and branding the product- but not always.
The problem with this business model is that your product is not unique, and therefore is heavily reliant on your branding and marketing skills. While for some this mightn’t be an issue, it may pose issues for others. Inevitably, you will also need to find a place to store wholesale amounts of product (where the soap won’t melt!) and have enough start-up capital to purchase them in the first place.
Pros & Cons
| Pros | Cons |
|---|---|
| Doesn’t require any of your time/labor | Must hold large amounts of product |
| No delay between orders being placed & shipping | Can’t control the quality or ingredients of the product |
| Easier than making to order | Less profit margin than making it yourself |
| Can’t offer custom orders/soaps | |
| High start up costs |
Price Breakdown & Profits
Bars Of Soap
In order to make a bar of soap, you will need some kind of fat/oil base, water, lye, and essential oil. Most of these ingredients can be readily found around the home/at the grocery store- aside from lye which can be bought online. It’s important to note that lye is a caustic substance and therefore should be handled with extreme care. We suggest wearing gloves and eye protection when handling it.
Profit Margins
| Type Of Soap | Material Costs/Wholesale Price (per 100g) | Average Sale Price (per 100g) | Profit Margin |
|---|---|---|---|
| Handmade | $1.69 | $8.35 | 495% |
| Reselling Wholesale | $5.33 | $8.35 | 157% |
References: Lush, Olieve and Olie, Soapy Butter, Tassie Soap Shed, N-Essentials, Candle Supply, Little Green Workshops, Bayside Soap, Green Living Australia, Etsy, Rusty Owl Sunbury
Bath Bombs
Bath bombs use many of the same ingredients and materials as a traditional bar of soap, and are therefore a great product to sell alongside them. The main ingredients used in bath bombs are: baking soda, citric acid, epsom salt, and cornstarch.
Most of these can items be found at the grocery store (or Costco/amazon if you’re buying in bulk), except Epsom salt which is more commonly found at chemists! Either way, they’re all extremely easy to come by and can be bought and stored in large amounts.
Like soaps, bath bombs can be made at home and don’t require any special tools or materials. Aside from a bath bomb mold, you shouldn’t need to purchase any additional equipment.
Profit Margins
| Type Of Soap | Material Costs/Wholesale Price (each) | Average Sale Price (each) | Profit Margin |
|---|---|---|---|
| Handmade | 1.44 | $8.24 | 527% |
| Reselling Wholesale | 1.95 | $8.24 | 423% |
References: Hahndorf Soap Factory, Nudie Beauty, SA Boutique Boxes, Wild Flower Bath Bombs, Adelaide Candle and Body, Little Brown Goose, Lush, Larissa Bright, Planet Yum, bathbombguide.com, Etsy, Bubbly Me, The Soap Guy
Case Studies
How Much Money You Can Expect To Make In A Month With An Established Business- Quench Soap
Jerika Zimmerman and her husband started their soap and bath bomb business in 2018, and have since been able to grow their business to a point where they bring in over $15,000 per month (after expenses)! According to their youtube video they have been able to achieve this mostly through income diversification. They sell their products through their own e-commerce site, Etsy, and direct to customers at fairs and farmer markets.
How Much You Can Expect to Make In SALES Your FIRST Year – Fiorella Soapery
In her first year of business, Caitlin Blue was able to make $3,822 in sales. She re-invested all of these profits back into her business for and has since been able to turn her small side hustle into a six-figure-a-year business. Like Jerika, she also has a youtube account where she talks about her soap-making business and gives plenty of helpful tips and tricks!
Conclusion
So… is selling soap profitable?
Selling soap can be an incredibly profitable side hustle or small business when marketed correctly. Both Caitlin Blue from Fiorella Soapery and Jerika Zimmerman of Quench soap were able to make significant profits, even in their first year of sales. The profit margins on soap bars are also extremely high- meaning you do not need to move a particularly large amount of product to achieve similar results.
While the market is somewhat saturated, with a good business model and an initial focus on selling your products locally (to friends, family members, and at farmers’ markets), it is possible to build a brand and name for yourself within the community.
Related Reading: How to Promote Your Etsy Business
