herbal soap making manufacturing business

How to Start a Profitable Herbal Soap Making Manufacturing Business

Herbal soap is a natural alternative to chemical soaps. However, one can use herbal soap in two ways. One is for skin and another for hair. Both are very popular in the Indian market. Furthermore, quality herbal soaps have good export potential.

India is a land of valuable medicinal herbs. Thus the raw materials are easily available throughout the country. The manufacturing setup doesn’t demand a lot of investment. Rather, a low-cost, small-scale unit gives equal profit. Thus, we can say the herbal soap manufacturing business is profitable.

Is the Herbal Soap Business Profitable?

Herbal soaps are gaining popularity day by day. Increasing health consciousness is the major driving factor for this. In addition, people are becoming conscious of their looks and style. And herbal soap is very effective in preventing early aging.

Due to the chemical presence, normal soaps are responsible for fine lines that end with early aging. In the soap industry, the popular segment has witnessed maximum growth within toilet soaps and it is the category driver. Recent phenomena in aromatherapy, ayurvedic treatment are also responsible for the growth of this industry.

According to a report by the Associated Chambers of Commerce and Industry (ASSOCHAM), the domestic herbal industry will grow rapidly in the coming years. In addition, we can expect the size of the domestic market will rise to Rs. 15,000 crores, reflecting a compound growth rate of over 20 percent.

European Union is the biggest market with a share of 45% of the total herbal market. However, North America accounts for 11%, Japan 16%, ASEAN countries 19%, and the rest of the European Union 4.1%. The forecast is that the global market for herbal products is expected to be $5 Trillion by 2050.

Herbal remedies would become increasingly important, especially in developing countries. India, with its biodiversity, has a
tremendous potential and advantage in this emerging area.

Benefits of Herbal Soap

  • First of all, herbal soaps remove dandruff from the hair
  • They prevent prickly heat
  • They have antiseptic properties
  • In addition, they act as body deodorizers preventing any foul odor from coming from the body
  • They beautify the skin
  • They do not bleach the color of the hair
  • Finally, they are not corrosive to the skin and do not remove the essential oils from the

Steps to Start Herbal Soap Manufacturing Business

Do Market Research

The first step to starting any business is to conduct extensive research and planning. You should conduct market research to identify the demand for herbal soaps in your target market. Also, study your competitors and their products to determine what sets your product apart from theirs. This information will help you in creating a detailed business plan that outlines your business goals, strategies, budget, and financial projections.

2. Select a Niche

Herbal soaps come in a wide range of varieties. Every variety has unique benefits and properties. You need to select a herbal soap niche based on your own skills, interests, and market demand. Some of the herbal soap types that are selling most at present are organic, vegan, cruelty-free, anti-aging, and aromatherapy herbal soaps.

3. License & Registration

For herbal soap manufacturing, you must obtain different licenses and registration from the Govt. authority.

  • First of all, register your business with ROC
  • Obtain Trade License from the local Municipal authority
  • Apply for Udyog Aadhaar MSME online registration.
  • Get GST Registration.
  • Obtain Factory License
  • In addition, the manufacturing, distribution, and sale of cosmetic products in India are regulated by provisions under the Drug and Cosmetics Act, of 1940. Check your state law regarding this.
  • Finally, we will advise you to check the specific licenses and permits of your state before starting the business.

Related: Best GST Software for Small Businesses

4. Raw Materials For Herbal Soap

It is without saying. the quality of your ingredients determines the quality of your final product. You need to invest in high-quality natural and organic ingredients that are safe for the skin and provide various benefits. Some popular ingredients in herbal soaps include coconut oil, olive oil, shea butter, essential oils, and herbs.

Find below a list of required raw materials for herbal soap.

  • Acorus Calamus.
  • Vetivera Zianioides.
  • Berberis Aristata
  • Cerous Deodara
  • Cuminim Cyminum
  • Embli Ribes
  • Phyla Nodiflora
  • Plumbago Zeylanica
  • Cyamopsis Tetragonolob
  • Emblica Officinalis
  • Phyllanthus Aamarus
  • Zinziber Officianale
  • Azadirachta indica

Related: How to Start a Soap Manufacturing Business

5. Herbal Soap Making Process & Machine

You can source the manufacturing technology from National Research Development Corporation, (A Government of India Enterprise). However, here you can find a detailed manufacturing process of herbal soap.

First of all, you must perform the extraction of herbs. You must maintain the required formulation. Then you can prepare the soapstock with pure coconut oil with pure potassium hydroxide. Mix the extracts as per the required formulation. Then allow the soap to set in the pan. Finally, cut to the required weight and size. Then it is ready for packaging.

In addition, to start herbal soap making, you will need to procure some basic machinery like a boiler and accessories, mixing tanks/steel pans, and a packaging unit.

6. Cost of Starting a Herbal Soap Business

The cost of starting a herbal manufacturing business depends on a wide range of factors. It includes production output,   location, equipment, raw materials, and other expenses. On average, the cost of starting a small-scale herbal soap in India will be around Rs. 10 Lacs to Rs. 20 Lacs. However, the investment can go up to Rs. 50 Lacs to 1 Cr. for large-scale ventures.

If you are short on funds, it is advised to approach banks and financial institutions for securing finance. Also, do not forget to apply for a credit card to meet small business expenses.

7. Have a Marketing Plan

You need to have an effective marketing and selling plan for the success of the herbal soap-making business. are crucial to the success of any business. Develop a distribution network of distributors and retailers, so that your product is available in most retail and departmental stores.

In addition, apply online marketing strategies such as social media, email marketing, influencer marketing, and content marketing to promote your products and brand. Also, consider selling your products online through your website or other e-commerce platforms.