There comes a time in a maker’s journey when they face a fork in the road: to sell or not to sell. Getting to that fork takes a lot of diligence and practice, trial and error. Deciding to walk down the path to selling takes determination and the patience to work through all of the regulations and rules that govern our industry.
So, how do you know when you’re finally ready to sell? We’ve got five things you shouldn’t skip on your way to selling your products.
#1: Your well-tested formula yields stable, consistent results.
Making an incredible product once or twice is not enough; you’ve got to make a lot of batches to be sure that you’ve got a stable formula. During the testing process, you should be keeping immaculate records–batch sheets and notes. Having these records available in case a batch fails can help to narrow down what the issue was so that you can correct it for the next test.
During your testing time, make sure that you’re allowing your products to cure properly and noting any differences in texture, color, or weight during this time. More information is a bit more work, but too little information can make it much more difficult to narrow down what may have led to a failure or anomaly.
#2: You understand safety and cleanliness are crucial.
Safety requirements don’t just protect you–they protect your customers, too. Products made in safe, clean spaces keep your products free of contaminants and keep the quality pristine. If you don’t have a dedicated area to make your products, or can’t ensure the cleanliness of your current space, take a step back until you can. You could have the most fantastic, beautiful product on the market, but if a customer opens your lip balm and finds hair, your business will not last very long.
#3: You know how much you need to charge to make a profit.
One of the most challenging items for makers is determining how to price their products. There are many considerations: where are you selling? Who are you targeting? And most importantly, what do you need to charge to at least break even?
Breaking even isn’t the goal, but it’s a starting point. You need to know exactly how much to charge per product in order to recoup the cost of making it, and then raise that price to make a profit.
This part of the process can identify some holes in your planning. If you’ve calculated everything and one bar of soap has to sell for $15 just to break even, you may need to adjust your ingredients or processes to lower that cost.
#4: Your label is compliant and doesn’t have any drug claims.
If you’re going to sell your products in most places, but specifically the US, you need to follow the FDA’s rules for labeling your products. There isn’t an asterisk there; these are not guidelines or suggestions, but requirements.
It can be tempting to say that your soap cures acne or treats psoriasis, but you can’t put that on your label if you haven’t registered it as a drug and gone through the required testing. You can’t even say that it cures something in your marketing, or verbally claim that it treats a disease at a farmers’ market when you’re selling. Understanding the limits of what you can on your label is just as important as knowing what you have to include. This understanding is critical to ensuring your business isn’t flagged by the FDA.
This can be one of the most confusing parts of selling, and we’ve got some resources to help you understand what you can, must, and cannot say on your label.
#5: You have insurance, even if you’re not selling quite yet.
Yes, you read that right: even if you’re not selling yet, you still need insurance. No one wants to consider this possibility, but people do not need to have bought your product in order to sue you over it. This means that even if you’re still in your testing phase and giving your products out for free to your family and friends, you should have insurance just in case.
Once you start selling, you may want to add additional coverage or insureds to your policy. Many policies, including the one offered through the HSCG (via Veracity), have options for more property or liability insurance, depending on your needs. It’s important to make sure that you have the proper insurance coverage for wherever you’re selling, since some venues also require certain coverage in order for you to sell with them.
Final Thoughts
The bottom line: you really can’t skip any of these steps. Having your formula nailed down, understanding your finances, and securing insurance will set you up for success and protect you from potential legal issues down the line.
Check out these resources to help you check some of these items off your list: