I frequently get asked about how I got started making and selling handmade products.
Today, I’ll answer some of the specific questions on this topic that I’ve received over time. If I left out something that you want to know, feel free to ask in the comments below!
I started making my own soap because of this little dirt-loving guy:
My son had a lot of allergies when he was little and it was impossible to find soap that he didn’t react to. I determined that I would have to learn to make my own bars, free from the fragrances and additives that caused him problems.
Once I successfully tackled soap making, I started looking for other homemade products I could make for us. My favorite discovery was learning how easy calendula balm was to make. (HERE is the recipe.) I had been paying a small fortune for a brand in my local health store, so this was empowering indeed!
After a while, I felt comfortable enough with my soaps and salves to start giving them as gifts. It wasn’t long before people were asking to buy extras from me. And that’s how I accidentally fell into selling.
1.) Is it profitable to sell handmade items?
That depends. Some people make a great living from it, while others barely break even. Some lose money. (I know this, because it happened to me at one point!) Good record keeping will allow you to sit down each quarter and see how your numbers are adding up. You’ll quickly realize if you need to adjust prices or make other changes.
The handmade soap market is heavily saturated right now. The good thing is that it’s a consumable item and people always want more. The bad news is that you’ll need to try hard to stand out in some way. Instead of focusing just on soap, I tried to develop unique products, such as my popular lotions and lip balms. Even though I share the recipes online, it’s more cost effective or convenient for some people to buy it.
2.) What about insurance?
When I first started thinking about opening an online shop, I looked and looked and looked for information on insurance. It wasn’t easy to find. I asked in various blogging groups I belonged to and people were strangely silent on the topic even when asked directly. (Including a very large shop owner.) My conclusion was that: (a.) I had become a social pariah in the blogging world OR (b.) nobody had insurance, but they didn’t want to admit it or talk about it. Logic dictates that the second answer is most likely.
I could write more on this topic, but I found this article HERE from TeachSoap.com that has some great information.
There are two reputable organizations online, that I know of, that offer insurance to members:
Be sure to check them out and compare to anything your insurance agent has to offer.
Should you get insurance? I can’t answer that question for you. That’s a personal decision you’ll have to make based on a thousand things including your comfort level, amount of sales, and risk tolerance. If you plan on selling at a farmer’s market though, you’ll likely be required to have some sort of liability policy in place.
3.) What about taxes and licenses?
That’s another tricky question I get asked a lot. I took one accounting class in my life and hated it so much, I almost flunked. So, I am not the best person to ask. If you don’t already have a good accountant, ask around at locally owned businesses that you like and trust to find out who they use.
A good accountant is worth every penny and then some. They can tell you details for your situation, but here’s what I did. I turned in a list of income and expenses from my blog and shop each year with applicable tax papers. There’s a 15.3% self employment tax on all of the income I bring in. (See this IRS link for more info.) Other taxes may apply as well and this will be different if you’re an LLC or other entity.
If you’re self employed though, remember this 15.3% figure when calculating prices!
Some states have extra rules and regulations as far as selling soaps and cosmetics; you may need additional licensing and/or inspections. THIS SITE has an excellent list of each state and its corresponding agency that can give you more information about that.
4.) Where can I sell at online?
The ways that I know of are:
- Etsy – has an article on how to set up a shop, HERE.
- Using PayPal buttons on your web site, HERE.
- Look into an online store or Facebook shop with Shopify, more info HERE.
- Start a subscription box with Cratejoy, HERE.
All of these options will charge you a small percentage fee for each sale, so keep that in mind when figuring out pricing.
5.) What’s the best place to order supplies?
There are so many great businesses out there, that I feel like I’m being limiting by offering up just the ones that I’ve dealt with. Don’t be afraid to explore new places and see how you like them!
Having said that though, these are the places I’ve personally ordered from and a note about each:
Mountain Rose Herbs: I’ve been a satisfied customer of Mountain Rose Herbs long before I started blogging. They have a great selection of dried herbs, essential oils, salts, clays, butters, and so much more. Since I live completely across the country from them, it takes a pretty long while to get an order from them, but it’s a small price to pay for such high quality.
Bramble Berry: I love Bramble Berry because they hands-down have the absolute best customer service around. I think a requirement to work there must be an extra gene of niceness. They also have pretty much everything you could need or want to make soap, salves, and all sorts of goodies. Just like Mountain Rose Herbs, they’re on the other side of the country so it takes a while to get my order. Still, it’s well worth it!
Bulk Apothecary: They have a wide variety of affordable ingredients and a large selection of essential oils for soapmaking.
Rustic Escentuals: They have some great prices, especially on lip balm tubes and supplies. I also buy waterproof labels from them, which I use on lip balms.
Nature’s Garden: Has the fastest shipping around! I was so pleased about everything with my order. They have some unique items that I hadn’t seen elsewhere. Lots of great projects on their site too!
Soaper’s Choice: If you make a lot of soap and buy in bulk, this is the place to order oils from! Shipping is fast too.
Wholesale Supplies Plus: They have a huge selection of ingredients and supplies for handcrafters plus lots of helpful information and recipes on the site. (They have a really informative newsletter too.)
Specialty Bottle: They have the biggest selection and best price on tins, bottles, and containers that I’ve found. Since they have shipping centers in two parts of the country, orders arrive fairly quickly and always in great shape.
6.) How can I get more customers?
That’s the million dollar question that we all want to know!
At first, my biggest source of customers was my own family and friends. As they started giving my products as gifts, I would get emails from friends of friends wanting to buy more. (Always put your web site or email on the label! Even for gifts!)
Eventually, my biggest source of sales came from my blog. (I’ll let you in on a secret though – the blog itself is a lot more profitable, and less labor intensive, than maintaining a shop, so I no longer sell products. I’ll talk more about blogging for income one day, in another installment of this FAQS series.)
Depending on what you sell, you may be able to approach one of your favorite bloggers and see if they’ll hold a giveaway for you. This is most likely to work with smaller blogs that you’ve seen hold giveaways before. You would provide the blogger with some free samples to try out and another set of goodies for them to give away. Sometimes you may have to pay a sponsored post fee to the blogger. Make sure to send them your best stuff! Some bloggers love giveaways, some don’t. My policy is to very rarely do giveaways and then only with a book I’ve written or that a close friend has written. You never know about other bloggers though, until you ask!
Here’s another thing I did: After my husband lost his job, he took small bathroom tile and other odds & ends jobs while he was getting his new business off of the ground. I would go with him to help and we’d leave behind a little gift from my shop, usually a homemade soap dish and a few bars of soap. Tie everything up with a pretty ribbon and make sure your shop link is on it somewhere.
Don’t forget social media! Instagram is a fabulous place to start showcasing photos of your products along with behind the scenes shots of products in progress.
7.) How do I know how much to charge? What about shipping costs?
Pricing is tricky. What I did was go through Etsy and search for people that had similar products as mine. I looked and compared what they were charging with what I needed to charge to turn a profit.
How do you know how much you need to charge to turn a profit? This is how I figured it out:
Go through the invoices/receipts for all of your supplies. I grabbed a random invoice from my soap making notebook from 2012 for this example. Prices will vary from vendor to vendor.
I paid $6.90 for one pound of shea butter. Dividing by 16 ounces in a pound, that makes shea butter .43 cents per ounce. HOWEVER, you must not forget shipping!
For this order, the FedEx shipping was $26.66. I ordered a total of 228 ounces of various oils altogether. Dividing the total shipping ($26.66) by the total oils (228) = I paid almost .12 cents extra for each ounce of oil that I ordered. So, my shea butter actually costs .55 cents per ounce.
You’ll come up with a long list that might look like the one below. Don’t forget to include tins, jars, and lip balm tubes too.
- Shea Butter – .55 cents per ounce
- Mango Butter – .64 cents per ounce
- Avocado Oil – .39 cents per ounce
- 1 ounce screw top tin – .55 cents each
- .15 ounce lip balm tube – .14 cents each
- and so on…..
For each recipe you make, look at your master price list and figure just how much money you have into it. Don’t forget to allow for labeling and packaging costs too.
An example: A double batch of one of my popular salves will fill six 2 ounce tins. The ingredients cost me almost $36.00 total or $6.00 per tin. I allow $1.00 for the cost of each tin itself plus the paper and ink to label it. Now, we’re at $7.00 per tin. Etsy and PayPal will take a percentage plus I have to remember to allow for at least 15.3% self employment tax. I’ll need envelopes or boxes to package it along with tissue paper, mailing labels, and other shipping supplies. On top of that, be sure to add in an allowance for the time you spend making, labeling, photographing, listing online, packaging, and driving to the post office. You can see how the hidden costs start to add up!
Figure shipping in a similar way. Look at what other sellers are charging and match them. Over time, you’ll get a feel of what adjustments you need to make. International shipping can be difficult to calculate. I lost money on pretty much every overseas order until I started having those be custom orders only. I figure out rates using the online USPS postage calculator HERE. You don’t need a fancy postage scale to weigh packages; I use my soap making scale.
8.) Can I sell something I made, using a Nerdy Farm Wife recipe?
That’s no problem! I built my first soap recipes off of one I found on the Miller Soap Site. I built most of my salve and cream recipes using my beloved copy of Earthly Bodies & Heavenly Hair. I always make tweaks and adjustments to a recipe so that it becomes my own. I fully expect you will do the same. My thought is that if someone has a top secret recipe they don’t want anyone else to use, then they shouldn’t put it on the internet!
The exception to recipe use is if you copied my entire post, word for word, and put it on your site or Facebook page or in an ebook pretending you wrote it. That kind of content theft isn’t cool and it’s also against copyright laws. I know most people know this already, but it’s still good to mention it for those who don’t.
You also shouldn’t make it appear that I endorse your products. I don’t feel comfortable doing that for anything that I didn’t directly make, with my own hands.
9.) How to label products:
Making labels for my products was probably the most challenging for me. I had to do a lot of experimenting!
I’ve written a post HERE about making labels for round containers using the online photo editor, PicMonkey. Many of their features are free, but I keep a running subscription so I can have access to all of their tools. At $4.99 per month, it’s a good investment for me.
If you plan on selling, you’ll want to familiarize yourself with FDA regulations. HERE is an article on how to determine if your product is a cosmetic, drug and/or soap and HERE is their cosmetic labeling guide.
HERE is a fantastic list of 214 words that you can use to name your skin care products that shouldn’t get you in trouble with governing bodies.
A main takeaway from the FDA information is that making health claims about a product is a no-no. For example, I used to sell my Herbal Healing Salve on Etsy. Technically though, I can’t claim that the balm “heals”, since I haven’t put it through rigorous and documented scientific testing. So, I had to change the name to “Herbal Salve” in order to keep Etsy and the powers-that-be happy. Likewise, don’t claim that you have the cure for dandruff or athlete’s foot or wrinkles. I know it’s restricting and annoying and repressive of small business and natural health…. but, those are the rules. We can sulk and grouch about it (I sure did for a while!) or we can just comply and get on with our happy life!
Update: THIS POST about the FDA targeting a small business, brings home the point that you really need to follow the rules carefully, if you plan to sell your products.
To stay up to date with legislation in the US that directly affects handcrafters, you may be interested in joining the Coalition of Handcrafted Entrepreneurs, which was created to advocate for small business owners.
10.) Last words…
Some final advice I would impart is that running a shop or small business can consume much more of your time and attention that you would think. When I had a shop, I found myself sometimes getting stressed with keeping up with supplies and inventory and runs to the post office. Don’t feel guilty about stepping back as needed. Burning yourself out isn’t going to help in the long run.
It can be hard to come up with the capital to buy the supplies you need to get your business going. I used our tax return to buy my initial batch of supplies and reinvested all of the money the shop made back into more supplies. As your shop grows, your extra income will too and you’ll be able to afford some of the luxury ingredients you’ve been dreaming over!
Did I leave anything out? Do you have favorite suppliers that I didn’t mention? Any tips or tricks I missed? Also, feel free to leave a link to your shop or site, if you sell products. I’d love to visit!
Links to Mountain Rose Herbs, Amazon.com, Bramble Berry and PicMonkey in this post are affiliate links. That means if you click on one and make a purchase, I earn a small commission for sending a customer their way. This is at no added cost to you, but helps support my blog and lets me keep doing what I do. Thank you! :)