manufacturing

How to Start Organic soap making business in 2021

Overview

Who would’ve that a product as small and as essential as a soap could have the capability of being organic, profitable and a huge business opportunity for you indeed

The global organic soap market stood at a whooping $222.3 million in the FY 2018 contributing to

It’s benefits to skin,
To building a substantial environment because of its organic production process and
Soap’s ability to give the skin the perks and advantages of natural ingredients, oils and fragrance.

Moreover, the investment involved in producing organic soap making and the profit margins because of the consumer niche it attracts has increased the scope of this business India.

Also, the large availability of natural ingredients required in an organic soap like saffron, green tea, neem etc the major produce by India has also increased the exports of this product globally.

Its time you wash your hands with this organic soap business opportunity

Market potential and uses

An organic soap is a body cleanser which avoids usage of any toxic and artificial dyes, perfumes and additives in its production but rather uses natural ingredients like essential oils, flavoured fruit essence etc

The market potential for this organic soap business is vast contributing to the diversion in demand for naturally produced soap to offset the skin anomalies because of the artificial dyes, colour and fragrance used in the regular soaps

Moreover, the backlashes on few products which offer skin whitening and brightening perks has offended a large niche of consumers and diverted them towards the organically produced beauty products which has practical and long lasting rewards

The market potential for this product can further be elaborated on the following basis

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On the basis of types of oils used in soaps

Beeswax
Cocoa butter
Coconut oil
Olive oil
Palm oil
Soya bean oil
Shea butter
Sweet almond oil

On the basis of botanicals

Herbs and flowers
Roots
Exfoliant
Dried fruits and spices
Botanical oils

Process of organic soap making

Melt solid oil
Make lye and water solution
Set temperature
Decide batch size
Add sugars and Colors
Bring soap to trace and add it to it
Super fatting
Add antioxidants
Moulding
Insulating the soap
Cutting
Cold press

Licenses required

The licenses required to set this business up is

MSME registration
Filing the application form 31
Approval under pharmacy act, 1948
Trade license
GST registration

Investment required

The investment required to set this organic soap business is ₹1lakh – ₹ 2.5 lakhs

Profits made

The profits one can earn from this organic soap business are ₹50000-₹1 lakhs

Target consumers

The target consumers for this business are as follows

Retail cosmetic stores: The retail cosmetic stores require the organic soaps to meet the demand of the skin and beauty conscious consumers who have sensitive skin and other skin anomalies or simply prefer organic soaps over artificial ones
Organic retail stores: The organic retail stores which deal in a variety of organic products could be your target customers to attract all the organic demand available while making them aware of the goodness and organic elements in soaps as well
Online beauty and cosmetic stores: The online beauty and cosmetic stores like Nykaa could be a large platform to attract the online cosmetic shoppers who are looking forward to experiment with new products
Fashion bloggers and influencers: The fashion bloggers and influencers make use of organic soaps as a part of their face routine tans also influencers their followers and fans thereby being another huge target consumers

Area required

The area required to start up this organic soap making business is 500-1000 sq ft

Raw materials required

The raw materials required to set this business up are

Lye/sodium hydroxide
Water
Oils
Antioxidants: grapefruit seed extract, Rosemary extract
Essential and fragrance oils
Scent fixer
Soap colour
Botanicals
Labels

Machinery required

The machinery required to set this organic soap business is

Soap cutting and slicing machine
Mixer/grinder
Soap moulding machine
Packaging machine

Manpower required

The manpower required for this business is as follows

2 skilled workers
2 unskilled workers

Moreover, ample training in terms of the following must also be provided with

Equipment usage
Safety and precautions

Business model and growth

The business model of this organic soap business can be defined using these four variants

Value proposition: The value which this business is likely to provide to you is

Easily available raw material
Low investment
Larger consumer target

Target consumers: The target consumers which this business is likely to bring to you is

Social media and fashion bloggers
Online beauty stores
Organic stores
Cosmetic retail and wholesale

Competitor review: The competition to your organic business would be

Unorganised organic soap makers
The body shop
Forest essentials etc

Marketing strategy: The marketing strategy that can be implemented by your business is

Advertising: through tv commercials and brand ambassadors
Tie ups : tie ups with fashions bloggers and social media influencers
Sales promotion: through sample promotion for beauty and make up, face tutorial workshops

Growth

The organic soap making business has the potential and has witnessed the following growth prospects

The organic soap making business has accounted for more than 70.0 of the global revenue in 2018
Moreover, the suppression of artificial dyes and chemicals in soaps have made consumers shift from regular to organic soaps

Profit margin

The profit margin which this business is likely to yield to you is 20%

Suggestions

It’s time to get some organic income coming in through this business and here’s why

Firstly, the organic soap business comes with low investment, easily available raw materials and higher profit margin
Secondly, because of the increased availability of natural ingredients of India the global demand for organic soaps from this country has been increasing as well
Lastly, it comes with low manpower and operational requirements