If you are a soap maker trying to turn a profit, you can’t just give it away by trying to compete on price alone. You are using your hard-won skills and investing your time and money to create something far superior to the detergent bars you can buy in a department store. You deserve to get paid for a delivering a better product.
If you ever wonder, or need to explain, why handmade soap is more expensive than typical big-brand store-bought bars – here are six good reasons:
- Handmaking soap takes time
- Soap making takes skill
- The ingredients are expensive
- It is as much art as it is functional
- Handmade soaps tend to be specialized
- Overhead adds up (equipment, insurance, etc.)
The six points above are a summary. Now let’s look at the details of what makes homemade soap expensive compared to the cheap “bath and beauty bars” available in supermarkets and Walmart.
Handmaking soap takes time
Spending hours crafting artisan soap, then making sure it cures properly for weeks or months can be a lengthy investment of time. Between creating recipes, selecting, and buying ingredients, then actually making, cutting, and curing the soap – you can invest hours in a single ten-bar loaf!
Soap making takes skill
Time is one thing, but what about skill? Even the simplest three-ingredient soap takes a measure of skill to produce. It takes more than mixing lye and water and oils. The lye solution is based on a very specific, carefully measured mix. You are mixing two components that go from room temperature to boiling in seconds and give off noxious fumes. Then you need to add the exact amount of fats and oils into a blend and heat to a temperature to match your lye solution. Once you mix in your lye solution to the oils it must be blended and mixed to correct trace.
Only after all of this is complete can it be molded, insulated, and left to complete its initial 24-to-48-hour hardening for cutting. After de-molding and cutting, the bars need to dry and cure for an average of six weeks, in dry yet well-circulated air.
Keep in mind that is just for the very simplest cold process soap. You will usually add multiple oils, fats, and butters as well as essential oils or fragrances, exfoliates, toppers, and even embeds. It can take weeks just to learn color swirling and loaf-top finishing techniques.
The average person shopping at the local supermarket or Target does not have these skills and many are willing to pay you for yours.
Soap ingredients are expensive
If you made soap just to give it away, it would be an expensive hobby. High-quality oils, butters, lye, essential oils, fragrances, and special lye solution liquids (like beer, wine, and champaign) can add up quickly. While these are technically soap making ingredients, from a financial perspective you can also consider them consumables because they are used up with each soap batch.
Soap can be functional art
This comes back to skill. Handmade soap is an artform. It takes time to develop techniques and recipes for the perfect bar whether by cold process, hot process, or melt and pour. A lot of people purchase soap without intending to use the bar right away. It is a functional decoration that looks and smells nice until it’s needed as a cleaning product.
Consider each bar of soap as a small sculpture, mood setter, and room freshener. Believe it or not, a lot of people who buy it will gladly make the purchase with that in mind.
Handmade soaps tend to be specialized
One of the best things about making soap is that you can create exactly what you want in small batches. This means most soap makers come up with their own unique specialties they become known for. And, no surprise, this kind of experimentation takes time, money, and the development of new skills.
Overhead adds up (equipment, insurance, etc.)
Molds, tools, and cookware are all infrequent, or one-time expenses that you need to make the product. Unlike consumables (like ingredients), these items are considered long-term reusable and count as part of your business overhead expenses. Your best bet is to buy the highest quality you can afford and take good care of it. I am still using the same 10-quart pot I used eight years ago – and paid $40 for.
Some items will wear out but are still considered overhead. One such tool is a stick blender. These can last several years if you take good care of them, but any electric motor under force will wear out eventually.
Beyond equipment you have shop space to consider. In a homemade soap business this can be a nice write-off of a portion of your home where you make the soap. And not just the kitchen area. Anyplace you legitimately use space for soap making, including drying and curing, could be a write off. Just be sure to check with your tax professional before making any deductions.
And finally, we come to your most important overhead business expense; insurance!
Soaper’s Insurance
I mention insurance as an overhead expense because too many first-time soap makers don’t realize how important it is. Before you sell a single bar, you need to have insurance that will cover you and protect your assets. A quick call to your homeowner’s/renter’s agent might be all it takes. But if they can’t help, here are a couple agencies that provide soaper’s insurance coverage.
RLI Lindbergh Insurance
If you want to start with an affordable policy that you can use right away for selling on the Web or at shows, it’s tough to beat RLI. They specialize in insuring home-based businesses that allows for a gross sales revenue of $7,500 year one and $10,000 annually after. Coverage begins at $300,000 and goes up to provide coverage for most small business soap maker needs:
- $300k Coverage = $159 annual
- $500k Coverage = $184 annual
- $1m Coverage = $219 annual
Link: https://www.rlicorp.com/home-business-insurance-coverage
Handmade Insurance:
I purchased a $1M policy at Handmade Insurance. The price is $285 per year, which is a good deal for that much coverage. Another nice benefit is the self-service portal you can use to add insured entities 24/7. You can create your policy and have a proof of insurance certificate in less time than it takes to get a pizza delivered.
Link: https://www.handmadeinsurance.com/
Be sure to get soap maker’s insurance before you sell or even give away your product.
What’s Next?
Now that you know why handmade soap is expensive compared to those store-bought bath and beauty detergent bars, why not learn to make soap in bulk? Making bulk batches cuts all of your cost and time and allows you to pass some savings on to the customer and even make a higher profit! Check out the post on this site to learn how to make handmade soap in bulk batches.