Soap making can be profitable if you follow four basic steps:
- Price Your Soap Properly
- Promote It Effectively
- Build Trust as an Industry Expert
These are the three top easy tips I wish someone taught me when I got started. They cut to the chase and help you avoid spinning your wheels doing things that take forever and do not get much in return.
How to Price your Soap
There are a few common ways to price your soap. The method you use should be the one that works best for your unique circumstance. Let’s start with the quickest method that produces an accurate profit margin…
Cost x 5 Soap Pricing Method
This is method of handmade soap pricing is very straightforward. You simply take all our costs that go into making the bar of soap and sell it at five times that amount.
For example, if you spend $1.00 on ingredients to make a bar of soap that sells for $5 – that sounds great, right? With only that information, it sounds like a profit of 5X, which is a decent margin.
But is that number right? Answer these questions to see…
- How much did the packaging cost?
- What about the label?
- Did you just get lucky with traffic or did you advertise or have a booth at a show?
- Do you have any overhead costs?
- What about insurance?
- How much did you spend on soap making equipment?
As you can see there are plenty of costs aside from just the soap making supplies such as oils, lye and fragrances.
You need to factor in all of your costs before you can make any sort of accurate estimate on profit.
Want More?
If you would like to get a detailed, step-by-step breakdown on the four top pricing methods, try this…
How to Price Your Soap Like a Pro is post on this site that will show you all you need to know. There is even a free downloadable soap cost calculator.
How to Promote Your Soap
Marketing and promotion are where most people new to selling goods tend to overspend.
When I first started selling my handmade soap, I lost money on each transaction. This is because I knew it would take time for people to get to know my product before actually buying. That means paying for a lot of clicks that did not result in sales.
The thing I needed was a trust factor. Having a new Etsy storefront while selling an unknown product with no star ratings is a tough place to begin. But it is where nearly all of us start.
If this is where you find yourself, consider these quick tricks to get you ahead of the curve…
Show Your Ratings
Copy some of your ratings and feedback from other sales mediums and place them in the product description. Be sure to place the words within quotation marks and properly attribute the quote to who said it – as long as you have their consent to do so. It is also a good idea to make it stand out form the other text in the description with formatting, such as using bold and italics.
Do a Promo
Run a short-term promotion such as buy-one-get-one for free or at a discount. This can work very well because it usually only costs a fractional increase to mail two bars of soap instead of one in a single package.
Surprise and Delight
Once you have made the sales, do a satisfaction follow-up contact and possibly add a small bonus gift to purchase made by people that seem highly engaged before and during the sales process. These are the folks that will take the time to write a review for you without ever being asked.
Offer Incentives to Those Who Show Interest
If you are using a site such as Etsy.com, keep an eye for anyone who favorites your shop or products. You can reach out to them and offer them thank you coupons. This is a nice gesture that often convinces people to give your new shop a try. After all, they already “liked” it.
Once you have a few positive reviews, you should start getting higher conversions form pay per click or other advertising methods. The first sale is always the hardest.
Become a Trusted Expert Resource
In any situation where money changes hands, the deciding factor always comes down to trust. The customer needs to trust that you will deliver on your promise of high-quality soap, fast shipping, personalized attention or whatever your unique selling proposition might be.
Trust is earned.
If you have never worked with someone before, they likely have no reason to trust you. But you can bet that having been on the short end of the stick in the past, they have plenty of reasons to not trust anyone new – including you.
To create a bit of trust in advance you can build up your local or industry reputation.
This might be as simple as seeing positive reviews on your page. Or, it might be a bit more involved like pointing them toward an article you published on an industry website.
Of course, getting that type of credential can be time consuming and difficult – until now.
Let Soap Startup Help You
If you would like to become a published contributor to an industry website, consider guest blogging on SoapStartup.com.
You can submit an article, series of tips or a recipe. If published, you will receive a byline credit containing your name, a short bio, and contact information/link.
Being a published author in any field adds instant credibility and trust factor. This is especially true when it comes to any hands-on skilled craft work.
What’s Next?
Use the form at right, or click here, to contact me and get the ball rolling on getting you published. There is no need to submit anything yet. Just reach out and I will respond as quickly as possible with next steps.
Once we are underway, you can also include photos to help illustrate your article or recipe. But it is not required.
Start thinking about what you want your bio to say!
As always, Happy Soaping!