From hobby to business
Soap making can be an addictive hobby, but when one has been doing it for a while turning this hobby into a business seems a natural progression. There are a couple of obvious things that happen when a soaping hobby emerges. First, just one batch of soap can be enough to last an entire family a year for personal needs. This can start to pile up around your ears just as soon as you start to get the hang of the process. Secondly, you quickly realize that you are making a high quality product that is better than anything sold in conventional stores, and people will absolutely pay for this product.
Once you realize this is something you can actually do from your kitchen and you can produce something that brings value to others, the gears in your mind start to turn with ideas of where to get supplies, logo ideas, thoughts of cute catchy names and the sparks turn into fire from there. With a little planning and thoughtfulness soap making can turn into a cottage industry that you can start any time and grow into a fruitful business.
However, before we think about getting stared, let's define something important from the start to set the foundation with the right goals in mind. There are two types of selling. One type of selling is a business and the other is still a hobby.
If your handcrafted project is being sold at a craft show or farmers market and the artist is not making a profit or only making enough to pay for the supplies and ingredients, This is not a business. It is still a hobby.
Either of these activities are A-OK. You absolutely can have an enjoyable hobby where you sell off your finished product so that you can bring in a little money to pay for he next batch of supplies. Just understand that you will always need to keep your day job, and no amount of increasing your production will start to bring you an income if you don't structure correctly from the beginning. This means choosing a price point that is appropriate for your item. Click here to read about how to set the price point of your hand made soap. This means counting every penny that goes into your work, and keeping yourself organized from the start. The goal of any business is to actually bring yourself an income. Once you have decided to take the plunge....it's time to get to work.
Reality of success
Is it possible to be a successful soap artisan as a full time job? The short answer is yes. Ultimately, if you are one of those people who are hyper focused and have already decided to be successful then nothing will hold you back. However, for us mere mortal it is helpful to be cautiously realistic and work through the learning curve. There are variable that will affect your progress and these range from your location to your own skills that may need a little polish.
The part of the country or world you live in does matter. In villages in Connecticut there are some very old pragmatic pioneer communities where people will, without a second thought, pass by a market table that sells a $5 bar of soap. Why? If you ask these customers its because that's not what soap costs, and they can get the bare minimum for $1. In a place like this, gift packages for Christmas and birthdays would work better because people are more open to the idea of small luxuries for special occasions. If you bring your market table just one hour west to the art dealer flea markets or down to the shore line, instantly your $5 bar of soap becomes comparable to a $5 luxury coffee from Starbucks, and suddenly the summer time tourists are flocking around. It is necessary to get a feel of the community where you want to sell your items. Here's a tip: If there is a Lush or a Starbucks within 5-10 miles of you then you have a market.
Counting every penny is going to make or break your start up. This isn't being mentioned twice to take up your time. It will quite literally be the difference between your hobby and business status. Hand crafted item that sells for $5 - $10 is a low price point. You must know every penny that goes into that product and pay attention to every penny that comes out of it. You can't afford to waste, be sloppy, give away, or under price anything when you are just making the transition from hobby to business.
Online sales change the game
A very common misunderstanding of small business in this modern world is that there's no need for an actual store but the internet will sell my items for me. This is actually true and not true at the same time. Let me explain. I have been building online e-commerce stores since 2006. It was quite a different world back then, and in many cases much easier. Not anyone could just have an e-commerce store. There was no Shopify and eBay was somewhat new. My websites were hand coded from scratch, and I had to actually work with UPS and the post office back then to write an API to integrate shipping. This means there were many fewer people who could sell online. Those of us who did sell made a spectacular income because search engines were also new and did not bury small mom and pop stores until 2011. Few sellers and more exposure made for a good combination.
Today the world has changed. The barrier to entry to selling online has lowered to anyone with the ability to sign up for a Facebook profile. This is good if this is the limit of your computer skill. This is bad if you don't want to get buried in competition. Being found, especially by strangers on a search engine, is no longer the magical power it used to be. If you want to experiment with this open an Etsy account now and post a few items to sell. See how many people browse your pages or buy from you. When you are starting out the numbers are near zero.
Is it even worth having an online presence for soap makers anymore? Yes! You must, and there are two things that will help you flourish above everyone else who is starting this endeavor. Fir st, don't think of your online store as a magical answer to anything. The fact that it exists is not going to make you an entrepreneur. Those days are over. Think of your store and the place where your face to face customers can find you when they want to re-order or come back when they are ready to order. Your online store needs to be loved and incubated by going out into the world and bringing customers from your market table or street kiosk to your online presence. The real life location and the online location need to support each other. The future of online sales for tangible retail items is going to be a hybrid type of marketing where the real world guides the online world for you to grow.
Online sales are a great way of loosing all your profit in one quick blow. There are two ways to sell online, create your own e-commerce shopping website or build your own store on a shopping platform. Building your own site comes with the learning curve of being a web design and engineer and the cost of hosting and building your site. Setting up on a shopping platform like Etsy or Amazon comes with monthly fees, listing fees, and final value fees. This may seem like just a few cents and only 2% to 5% of the sale, but 5% of a sale doesn't mean you are giving up 5% of your entire profit. Once you calculate your actual profit after all the expenses are cleared, these platform fees can turn into 20% - 70% of your entire profit! When done correctly either of these methods can contribute to the value and growth of a business but they must be managed carefully with skill. That's why we recommend trying your hand at BathArtisan.com, which is a sellers platform built especially for soap makers that doesn't not charge any of these fees. The goal of Bath Artisan is to help promote small business and give artists the little help they need to get the gears moving where sellers can build their own store and get in the flow of building their customers and products while keeping their money in their own pocket. Learn more about opening your artisan store on BathArtisan.com here.
Most valued skill
When we asked seasoned artisan soap makers what the most valuable skills utilized in starting up a small soap making business many of the answers were predictable and a few were a surprise. The most common answer was pragmatic and familiar.
"Right from the start, count every penny and keep your books organized."
According to Tanya Kiever of Queens, the only thing that matters is that you have more pennies when you are done than when you started. Book keeping is the most important aspect of a soap making business. Ok, actually making soap is the most important part, but you won't be dong it for very long if you don't pay attention to your pockets. Accounting doesn't have to be complicated, and if you have absolutely no experience you can search for a few videos and spend a few hours learning the basics. Ultimately you need to now what it costs you to make every bar of soap and what you need to sell your soap for with all the costs and profit included.
This needs to be written down, recorder, and revisited once in a while to make sure the numbers are all in line.
Where to find support
One might be surprised to consider that other soap makers can boost your baby-sized business into a larger enterprise. If you are just making the transition from hobby to business there is no reason to reinvent the wheel. There are thousands of small hand crafted soap markets all over the world, and many of them work with fantastic success. Do not think of another soap seller as a competitor. Think of them as a kindred team mate. Be friendly and inviting to other soap makers, and if you meet them at you local farmers market or street fair consider setting your markets up side by side.
A soap maker setting up their own market table is not your competitor and is not 'stealing' your business. In fact, you may increase sales by sticking together, and this is a well known method that corporations and franchise companies have been using on you for decades without you even knowing. Have you ever wondered why a Starbucks or a Dunkin' Donuts or a Subway might show up three blocks away from another or the same store? These companies teach their franchise owners that by clustering stores in a certain proximity will train their customers to keep their brand in mind several times as they travel around town, and when it comes time to think about lunch or snacks there will be a brand logo that pops to mind and one of several locations is sure to be conveniently near by.
OK, so that doesn't mean you need to have multiple tables scattered around your local open market, but you can take the principal and be flexible with the idea. If you and other soap makers cluster your tables near each other in the same area of a street market, you are training your customers to expect these items at a certain location with predictability, so when you have return customers they know just where to find you. This also allows for new customers to find you because people who are looking for similar items will begin to know to drift into that general area. In just a few short weeks, you and other sellers will begin to draw more customer than if you set up your table alone in a random place.
"But if they are selling soap and I am selling soap..... how are they not my competitor?" Fair question. You need to not think of someone else's sale as a lost sale for you. Your artisan products are not the same as main household staples. In the farmer's market / street market environment, your customer doesn't have a grocery check list with a one and done mindset at the register. Your items are a bit of luxury mixed with a unique look and craft. If a market customer browses a table and sees something that pleases them they will usually make an impulsive purchase as many times as they find something attractive. At a $5 to $10 dollar price point for a little piece of luxury, a purchase from the table next to you isn't going to stop the same person from buying something they may like at your table. It is more likely that this customer is just getting warmed up to spend a little money.
Think of it this way, it is perfectly reasonable to imagine that a person can say, "I don't need to spend $6 at Starbucks. I have coffee at home for $1." Yet, the lines at Starbucks are often bursting out the front door of their small buildings. The reason is because that $6 dollar price point is small enough to provide a little experience of luxury, creativity, and ambiance. Your artisan soap carries the same experience for your customer and if you have something that pleases them you have a sale.