This hobby, moreso than many others, seems to have people opening up their own Etsy shops and stalls at local markets within months of making their first lip balm. And frankly, that’s a bit concerning. If you told a friend you’d just learned to make a great marinara sauce, they wouldn’t encourage you to open an Italian restaurant straight away, but it seems like as soon as you hand somebody some homemade body butter, they’re asking you why you don’t have your own brand and business yet. These words of encouragement are usually coming from a place of love and excitement over your new hobby (and their new source of super awesome lip balm!), but it’s really important to understand that selling your kitchen creations to the great wide world isn’t as simple as printing some labels off your computer and popping up a table at a craft fair.
This is by no means a complete list of things you should be considering when starting up your own business, but it’s a good starting point. Also: this is also not a warm and fuzzy “go for it, you can’t fail, what can go wrong!” sort of article, so consider yourself warned.
Ok, so that one’s a bit of a downer to kick things off with, but honestly, my first instinct is just “don’t”. I would say that if you haven’t talked yourself out of selling stuff at least once, you haven’t done enough research into regulations, liabilities, and all the “what ifs”.
If you’re thinking about selling stuff to the general public and you’re not at least a little scared, you probably aren’t thinking about all the things that could go wrong—and you really have to be! This is you on the line. Your reputation. Your business. Possibly your house, too, if you don’t have insurance and/or haven’t incorporated.
What if somebody has an allergic reaction to an unlisted ingredient and sues you? What if you discover six months in that your signature lotion turns into a disgusting mouldy mess at the 7-month mark? Also, this is a hobby that you enjoy, and not all hobbies can survive the leap from fun to business. Will you still love this if you have to do it? And if you have to spend your weekends going to craft fairs, schmoozing with potential customers, dealing with potentially unhappy customers, going to the post office, and tracking down lost packages? Do you really want to complicate your hobby that much?
If you’re going to, make sure you really know what you’re doing
You should be years into DIYing, if not decades. You should understand manufacturing and storage best practices. Know your recipes inside and out, and how they do over the long term (months and years, not days and weeks!). You should be able to troubleshoot for yourself, know which ingredients do what in a recipe, and how to make good substitutions. Understand and appreciate why working by weight is best. Know what needs a preservative, understand solubility, and know why certain things don’t work—not just that they don’t. You should know enough to know what you don’t know—recognize your own blind spots and set out to fix them.
Use your own recipes
I’m not saying this because I’m stingy and selfish and I don’t want you selling things made from my recipes. I’m saying this because you should know how to develop your own recipes if you’re going to be selling things. You should not need recipes developed by somebody else to run your own business—that would be like opening a restaurant where all the dishes are made from Jamie Oliver cookbooks. You need to be comfortable with formulation and creation. Not because everything you sell has to be your idea, but because you need to have the knowledge that’s required to develop recipes.
Something else to keep in mind with small-batch, personal use recipes you find online is that they are rarely (if ever) tested or designed for resale. This is true of many of my recipes. Most of my lotions, while fine for personal use in small batches, will not have long shelf lives thanks to all the delicious bug food (herbs, aloe vera, botanicals, honey, etc.) they contain. Yes, even with preservatives. I would never sell most (if any) of my lotion recipes.
If you are a skilled and confident formulator and you still want to sell something made from a formula that is not yours, please ask the creator for permission, credit them, and share your profits with them in some way, be it via Patreon or by paying them a licensing fee. You are profiting off that person’s hard work, and you clearly think their work is valuable enough to be profitable to you. They deserve a share of those profits.
Understand shelf life and preservatives (especially if you’re going to sell anything with water)
Every insurance policy I’ve looked at does not include coverage for fungus exposure, and if you’re dealing with water (or your customers might introduce water to your products), fungus is a possibility. If you want to sell anything that contains water, you better be super sure you understand how to keep fungus, mould, and other microbial spoilage from happening, because you just might not be covered at all if those little beasties rear their ugly heads.
Research the governing bodies and rules in every country you intend to distribute in
It varies by country, and ignorance is not an excuse. Health Canada requires detailed forms containing your formulas to be filled out and submitted for everything you sell (and if you don’t, that often voids your insurance). The EU requires extensive third party testing. The USA is very picky about pigments. Know the laws. This includes labeling laws (what languages do you need? Font sizes? What does “may contain” mean? Do you have to list your address on everything you sell? Do you need to prove insurance?) and import laws. I would recommend never relying on anyone but that governing body and proven professionals for that information. The government will be enforcing those regulations, and they won’t care if you’re breaking those regulations because that blog or Facebook post you read was flat-out wrong. You’ll still be on the hook.
You should have it. Definitely. Make sure it applies to all the countries you’re selling/shipping to. I found insurance literally tripled in price to get coverage in the USA as well as Canada.
It’s probably a good idea to incorporate, too, so if you get sued, it’s your company that’s being sued, not you. That way your company can go bankrupt, but you won’t lose your house. This is not an insignificant cost; beyond the actual registration fees, you’re now looking at needing a corporate bank account, filing corporate taxes annually (and perhaps collecting and remitting sales taxes), and a whole lotta extra paperwork.
Don’t count on your friends and family to be customers
You know all those people who are encouraging you to sell your stuff? You cannot count on them to actually buy it. Those people who are used to getting your stuff for free will often balk at the cost when you’ve gone to the effort and expense to pay to have packaging designed and printed, insure your company, incorporate, design and launch a secure e-commerce platform, commission professional photography, and actually factor in the value of your own time. If you don’t have some plans on how to find new customers who will actually buy your product instead of just telling you it looks nice and asking if you have any freebies, you should not start selling stuff.
Be able to stand on your own two feet
You should always be learning, but if you find you have more questions than answers about most recipes you see, that is a good sign that you are nowhere near ready to be selling anything you make.
You should not still be asking the following questions:
- Does this need a preservative?
- What is the shelf life of this product?
- How can I scale this recipe up or down?
- Does this need an emulsifier?
- Can I use X as a preservative in this recipe? (ESPECIALLY if “x” is vitamin E, rosemary seed extract, or any other antioxidant!)
Recognize the limitations of your knowledge and experience
You might be totally qualified to sell 100% oil based concoctions, but not confident enough to sell anything that contains water. That’s totally fine! Keep learning, experimenting, and making—you’ll get there some day.
Sell only very thoroughly tested recipes
I can’t stress this enough. This isn’t like a restaurant where you can have a different “chef’s creation” on the menu every day. That chef’s creation only has to last half an hour, or however long it takes you to eat it. Somebody might buy that lotion, stick it on a shelf in their bathroom, and then open it 8 months later. What’s it going to look like in 8 months? You need to know the answer to that question before your customer calls you to ask if that lotion is supposed to be fuzzy.
You should also consider paying for real, professional, laboratory-done stability/challenge testing.
Make sure you also test your packaging. Does it leak? Rust? Do the lids crack and fall off after a few months? Does it stand up to extended use, like being banged around in a purse or left in a hot car?
Learn what you can, can’t, and have to say on your labels
Ingredients, INCI, sell by dates, weights, languages, font sizes, addresses, cosmetic vs. medical claims—know your stuff, and know how it changes depending on which countries you’re selling in.
Do lots of math
Become besties with your spreadsheets and formulas. Yeahhhhhh math, baby (prove your 7th grade math teacher right!).
Do everything by weight & in percentages
The accuracy of weight really comes into play when you need consistent results every single time, and when you’re scaling recipes up and down. It also makes calculating cost per product mucho more accurate. Absolutely nothing should be done in volume measurements—drops, tablespoons, teaspoons, nips, dashes, fluid ounces, cups—whatever.
Also, make sure all your formulas are written in percentages (of weight!) for easy scaling.
Calculate the cost of shipping into your ingredient costs
When you’re calculating out cost per gram of your ingredients, don’t forget to add on some extra for however much you’ll end up paying to ship those ingredients to yourself. I find I usually end up paying an extra 20% of the order value to get ingredients to my door, so I add another 20% to the cost-per-gram of my ingredients, which is then reflected in the final cost per item.
Account for the fact that no recipe has 100% yield
Whether it be the butt ends of a loaf of soap, the lip balm lost to spillage, or the body butter you can’t quite scrape out of your bowl, no recipe will have 100% yield.
Remember that everything costs money
Selling and listing products costs money, be it Etsy, Shopify, or Square. Getting paid costs money—every payment processor that isn’t cash takes a percentage of your sales as their cut. Packaging, labels, driving to the post office, bubble wrap; everything costs money. Remember this when you calculate your prices, and when your friends ask why your soaps don’t cost just $1.50 because that’s what the ingredients cost.
Consider packaging sizes when it comes to shipping out your products
If your national postal service has a special rate for packages that are under 3cm thick… perhaps consider looking for as many tins and tubs that are under than limit so you can secure the cheapest shipping possible for your customers.
Hire a designer & photographer
Perhaps I’m a bit biased here because I am a graphic designer, but I really do think having a professionally designed brand makes a world of difference in how valuable and trustworthy your products look. A photographer is a bit less important as it’s easier to take nice photos of a beautifully designed and made product, but if you are going to do your photography yourself, make sure you have a handle on lighting and staging, and take care to ensure consistency between photographs so your brand appears reliable and consistent.
Proper ingredient storage, stock turn over, expiry dates
Research storage regulations from whoever regulates this sort of thing in your country. Don’t buy in bulk if you can’t use/sell it all. Consider formulating with ingredients with longer shelf lives where you can. Don’t make a ton of something that you won’t be able to sell while it’s still fresh. Keep an eye on expiry dates so you aren’t making product with expired (or nearly expired) ingredients. Obviously a lot of this will require some trial and error, and you’ll need to weigh the risks of buying too much vs. paying a higher cost per gram for the smaller size of something, but keep notes and try your best!
Don’t forget to pay ’em, obviously 😉 And figure out if you need to be charging sales tax and remitting that to the government on a regular basis. Get a good accountant; if you’re a business (in Canada, at least) you cannot file your own business taxes—you must pay a professional. It’s worth it to make sure that professional is somebody you can call up for advice and input when its needed.
Worry like a champ
Think like a lawyer—consider all the possible areas where things could go wrong and anticipate them. Do you use common allergens (nuts, soy, eggs, wheat, gluten, etc.) in the area where you produce your products? What are the cross-contamination possibilities? What if, what if, what it… Anticipating problems helps prevent them!
Alright, well—there’s my assorted points and thoughts on starting your own skin care brand. I hope you can see that these points come from a place of worry and concern, not dream killing and trying to stifle the competition. I don’t want you to get sued, or to accidentally hurt somebody. I also don’t want our little cottage industry to get a bad reputation due to poorly formulated products and inexperienced makers. This post doesn’t even touch on the normal financial risks and outlay associated with starting and running a business, so there is really so much more than this—there are just the things that keep me up at night. Kim over at Naturally Nourishing has a great post on this as well.
Do you have your own skin care business? Have you thought about it? What have you learned? I’d love to hear about it in the comments!