How to Start Shampoo Making Business in 2021 – Costs, Profits, ROI

Table of Contents

How to Start Shampoo Making Business  

Everyone wants to have smooth and silky hair on their head and hence Shampoos’ have become one of the most widely used products on almost a daily basis. Apart from soaps, which after the year 1930’s had almost lessened as usage due to the irritation that came after using on the face, and so on, Shampoos had started to dominate the market. Now, if we talk about the current scenario, then surely, we can comprehend the graph of demand that is being generated by people who prefer using all the different kinds of Shampoos available. 

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Overview 
 
The first piece of information that we should keep in mind is that Shampoos belong to the category of Personal Care products, and is also one of the Fastest-moving consumable goods, or more commonly known as FMCG. It is used widely in almost every household by at least one family member using it once in a day. Hence, compared to other FMCG products, shampoos are a type of product which has even more demand and sale in the market then all the other belonging to the same category. 
 
Another thing to make a note of is that the growing demand has led to various types of solutions being offered by this industry. We now have various types of shampoos available in the market, according to the customer’s choice and the type of hair. There are Shampoos that are specifically made for silky hair, then there are those which are for dry hair, rough hair, dandruff hair, and so on. With so many different varieties and types to offer, the Shampoo industry just opens up more potential and scope for manufacturers.  
 
Apart from types and varieties, nowadays Shampoos are also available in various types of forms and quantities. To be more precise, rather than the bottles of Shampoos that are widely sold, the market has seen more sales and volumes in terms of Sachets. Sachets are very cheap and are normally meant for a one-time or 2 times usage. Aside from being budget-friendly, they are also quite satisfying and an outing family’s first choice of a product while on travel.  

1. Licenses Required for Shampoo Making Business  

A. GST Registration 
B. Firm Registration  
C. Trade License 
D. Current Account  
E. IEC Code  
F. Trade Mark 
G. Udyog Aadhar MSME Registration 
H. NOC  
I. BIS Certificate 
J. ISO 9001 Certificate  

2. Raw Materials Required for Shampoo making Business. 

The quality and effectiveness of your Shampoo would depend upon the Raw materials that you choose for the same. However, different types and varieties of Shampoos would require different types of Raw Materials for the making. A handful of Raw Materials that you may require are as follows. 
 
A. Oil 
B. Coconut Oil 
C. Triethanolamine Lauryl Sulphate 
D. Oleic Acid 
E. Hand Tools 
F. Stearic Acid 
G. Perfumes 
H. Handling tools 
I. Colour  
J. Preservatives 
K. Deionized Water 
L. Detergents  
M. Alkanolamides    

3. Equipment Required for Shampoo Making Business 

The number of Raw Materials required for Shampoo is more in the numbers, however, the equipment or the machinery required for Shampoo Making business would vary according to the type of Shampoo you manufacture. The Equipment required is as follows. 
 
A. Bottles 
B. Drums 
C. Ph scale 
D. Packaging Materials 
E. Mixing Machine 
F. Cooling Machine 
G. Bottle Filing 
H. Miscellaneous Equipment 
I. Laboratory equipment 
K. Weighing Machine  
L. S.S. 304 Open Tank   

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4. Investment required For Shampoo Making Business

 As you may have already observed, the major part of the Investment required would be dedicated to the working capital which would be spent on acquiring and storing the Raw Materials. However, the investment amount may be more if you plan to manufacture more than one type of Shampoos in the market right from the beginning. An estimated investment required for Shampoo Making Business is given below. 
 

CONTENT  AMOUNT 
Small Scale   6 to 10 lakhs 
Medium Scale (Multiple)  10 to 20 lakhs 

5. Expected Profits that can be Made from Shampoo Making business 

The Expected Profits that can be made by manufacturing Shampoos would depend more on less on the types of Shampoo that you make and the quantity in which you sell in the market. For example, if you sell your Shampoo in Sachets, the profit that you may make would be quite low compared to the ones that would be made by selling in Bottles. 
However, considering the average profit that a Shampoo Manufacturing Business can make by manufacturing one or more of the types can be ranged between Rs. 45000 to 1.3 Lakhs a month. However, the above number is just an estimate of profit that can be earned, it may vary.  

6. Manpower Required for Shampoo Making Business 

Manpower is required by any business, be it a small or a large-scale business. In terms of the Manufacturing business, you need a lot of workers to run the machinery, take care of the quality of the product, preferably do the R and D which is required, and so on. Depending on the multiple types of Shampoo and the quantity bar that you wish to sell and manufacture, the amount of manpower that would be required would vary. 
 
A. For a business that plans to carry its operation on a small-scale, the manpower that would be recommended or necessary would be at least 2 skilled and unskilled workers, and preferably a supervisor who would overlook for the types of Shampoos that are manufactured.  
 
B. For a medium or a large-scale business, you would require more than 4 skilled workers and even unskilled workers, combined, and a manager as well. Here, once again, if the manufacturing plant is engaged in more than one type of Shampoos, then the number of workers required may increase in numbers.  

7. Profit Margin 

In Shampoo making business, depending on the types of Shampoos and as we discussed above the quantity in which you plan to sell in the market, the cost of your product would differ and hence the profit margin too would differ as well. You can expect to earn a profit margin or percentage that lies in the range of 25% to 40%. The numbers may vary, especially if you deal in Sachets. 

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