What it costs to start

The barrier here is not the first hundred dollars. It is the third thousand.

The equipment is cheap

A double boiler or melting pot, two scales, a thermometer, a spouted pouring vessel, a filling tray.

All of it is a modest outlay and none of it is specialized enough to be hard to buy. This is the cheapest craft in the estate to equip.

The materials are not the cost

Wax, butter and oil for a few hundred tubes cost less than the tubes do.

Which surprises people and reframes the whole business: you are not buying ingredients, you are buying packaging and putting a small amount of formula inside it.

Packaging is the real number

Tubes, caps, labels, shrink bands, cartons and a display unit.

And every one of those has a minimum order quantity measured in thousands. A label printer's minimum is frequently more labels than you will use in a year, and the unit price only becomes reasonable at quantities that commit you to a design.

That is the cash requirement in this business, and it lands before the first sale.

What actually stops people

Not the money. The realization, somewhere around the second reorder, that the packaging minimums force a decision they are not ready to make: which size, which color, which flavor names, which label.

The way through is to buy small and expensively at first, accept a poor unit cost while the range settles, and only commit to volume once you know which three flavors actually sell.

Paying twice for the first thousand labels is much cheaper than owning five thousand of the wrong ones.

References