Getting Started with Contract Manufacturing and Private Label

When you're starting a soap business, you've got a LOT to figure out. Your target market, branding, rules and regs, if you're going to sell retail or wholesale and where...the list of tasks for a biz owner is never ending. 

But before you get too overwhelmed, there is one thing that you can get off your plate easily and cheaply. And that's making the soap itself!

Ever heard of private label? Because it can be one of the best things to ever happen to your and your soap biz. Read on and find out how buying custom bulk soap can change your life.

There are many great reasons that private label might be the way for you and your soap business.

Scenario 1: You're starting a bath and body company but don't want to deal with months and months of trial and error creating kickass recipes, spending loads of money buying all of the large-scale manufacturing equipment, and breaking your brain figuring out all of the requirements of good manufacturing processes. In fact, you'd rather outsource the whole soapmaking bit altogether. 

Scenario 2: Let’s say that your established soap biz has been booming. Really booming, booming -  beyond what your teeny tiny manufacturing space can handle. You can’t physically make more soap, and you’re not ready to rent a big manufacturing space and hire employees. What do you do? 

The answer to both of these dilemmas is the same. It’s time to look into private label or contract manufacturing.

What is Private Label?

Private label is when a business or brand (that’s you!) purchases already manufactured soap and then places its own brand or label on it. 

Basically, you work with a soapmaker that makes bulk soap, then add your business’s label and branding, and turn around to sell it to your customers.  

You might be able to make slight customizations to the soap such as choosing the fragrance or color, but most likely you’ll be choosing off of a pre-set “menu” offered by your bulk handmade soap supplier. 

Okay, so what's Contract Manufacturing?

If you love the soap formula that you’ve worked so hard on and don’t want to sell someone else’s recipe, then contract manufacturing is the right fit for you.

Contract manufacturing is when you outsource the production of your soap to a third-party manufacturer. You provide all of the specifications - the ingredients, additives, fragrance, and design - and the manufacturer makes it precisely the way you want it.

It’s still your soap - you’re just not the one making it. Think of it as hiring a private chef to cook for you rather than ordering off of a restaurant menu.

And yeah, I already hear your objections. “Making soap is the fun part! The part that I actually like! Why would I want to stop?”

There’s often a point of growth in your soap business where one human being can’t keep up with production while running a biz at the same time. And frankly, that’s fantastic! It means that you’re doing incredibly well. But it also means that it’s time to outsource a good chunk of the work to someone else. Sometimes, that's marketing, accounting, fulfillment, and even operations... but don't forget that outsourcing the manufacturing is an option and can free you up to focus on the business.

Why else would you want to go the private label route?

• It’s cost-effective. With private label, you skip the research and development stage and know you’re buying handmade soap with proven formulas that your customers will love.
• It’s a huge timer saver. With all time you get back not being tied to your soap pot, you can concentrate on solidifying your target market and branding, marketing, and sales. You know, the money-making parts!

What to Expect When You Work With a Bulk Soap Vendor or Contract Manufacturer

Most bulk soap vendors, whether it's private label or contract manufacturing, will have a set minimum of bars per order. Use product forecasting to figure out how many bars you will need, and ensure that your needs align with these minimums. (Product forecasting is looking at how many bars you sold during a certain period last year and using that data to predict how much inventory you’ll need this coming year. We teach this more in-depth in Courage to Conquer!)

If you’re having your formulas made by a contract manufacturer, you can request them to sign an NDA (a non-disclosure agreement) to protect your intellectual property. A signed agreement will keep all the hard work you put into developing your soap formula safe and sound!

You also want to be sure to communicate exactly what you want from your manufacturer. For instance:

- What size do you want your bars to be? Do they offer that size or shape?

- Do you want the bar to have a textured top, or to be smooth? Is that important to you? (Fun fact, we're one of the few contract manufacturers in the U.S. that does truly textured tops!)

- Do you want each bar to be stamped with your logo? They need to know that upfront so they can give you an accurate quote.

- Do you want them to package your soap for you? That's not always an option, so make sure to ask!

- Want to use a fantastic new oil in your bars that no one’s heard of? Your manufacturer will need to know that upfront to give you an accurate representation of costs. They'll need to do additional research and development to meet your needs (and that cost will get billed to you!)

Buying your soap private label or using contract manufacturing means peace of mind for you. No more managing finicky fragrance oils. No more figuring out why your soap batter soap volcanoed this time when it’s never done that before. No more crying over your stick blender when finishing a huge custom order of the same thing, over and over. You’ve outsourced it! 

You can focus on running your business and reap the benefits of having someone else deal with the mess. That’s what I like to call a win/win.

Hey, did you know Modern Soapmaking offers contract manufacturing and private label? It’s true; you can outsource your bulk soap production to Kenna and her team in upstate New York. If that sounds like a dream come true, dive in and learn more.