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Author Topic: Would like to sell soap, what do I need to know?  (Read 5736 times)
aab1
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« on: February 18, 2012, 10:13:22 PM »

I've been making soap for personal use and as gifts for over 2 years and would like to start selling soap.

I already run a few businesses I started myself and was looking for a new business/product to sell and realize soap is perfect because everyone needs soap and it's fun and relatively inexpensive to make.

I'm in Canada, do you need a license/permit to sell soap like you do with food? I heard of some countries requiring a permit. What if I want to sell online and ship to other countries, is there any problem with that?

And what else in general do I need to know before I start selling soap?

Thanks
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brnicholas
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« Reply #1 on: February 19, 2012, 04:20:04 AM »

I think you can go on line and find web pages for your city and provincial governments and most likely they will have all the information and forms ready for you to download. It's probably easier to start at the lowest level (city government) because they are most likely going to make sure you have everything else in place. If they don't have any requirements, go the the Provincial government and I'm sure they will have requirements. Good luck.

Br Nicholas
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ceebee2001
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« Reply #2 on: February 19, 2012, 07:18:46 AM »

We have a Small Business Development office in town , I'm in Ontario.  They will walk you through searching and registering your name  etc.

Try searching  "Community Futures Development Corporation"

 Our local community collage also offers classes for people interested in the business end of the start up, filing taxes, dealing with HST.

I know I have a booklet at home , I'm going to need a break from the hospital later today, I'll scan it and email it to you.  I know it was not all Ontario based info.  

********

OK   the paperwork I have I just scanned, ready to be emailed
The website for our local small business centre is

www.cksmallbusiness.ca

 Now a lot of this is Ontario based but there are links for all of Canada.  It should give you a foot hold on where to look at home.  

Yipppppe, I found a free file sharing service to upload the pdf file.

http://dl.dropbox.com/u/63083570/Small%20Business%20Startup.pdf
« Last Edit: February 19, 2012, 01:50:40 PM by ceebee2001 » Logged
aab1
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« Reply #3 on: February 19, 2012, 04:49:02 PM »

Thanks a lot for the info.

BTW, if I decide to sell online only, do all the same regulations still apply?

Also about charging HST if sales are over $30 000, what if I sell for $10 000 in Canada and for $40 000 to other countries. Does that mean I need to charge HST or not since Canadian sales are $10 000?

What about insurance? It seems to be optional, is it really a possibility to get sued over soap if I make sure they are all safe?

Thanks
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ceebee2001
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« Reply #4 on: February 19, 2012, 05:07:31 PM »

Income is income  whether it is on line, in a store or at a craft show.

I personally will never work without insurance, if some one even thinks they had a reaction to your product (even if it was from something else) you could lose everything.

I do catering and if someone were to get sick, even if it was from the lunch they had at home, they could assume it was my food (because they would NEVER get sick from something they made) and I could be sued.  I do not want to lose our house and life savings because of a stupid jerk.  Even if you were to be found Innocent in court, it still costs $$$$ to defend yourself.

Get a hold of your small business office and talk to a councillor for free.  Even a lawyer has a one hour free consultation.  They will have the info for your province and would be able to help you with the cross border stuff.  I have no idea about the HST stuff, I have an accountant who takes care of all my paperwork and taxes.

It's great to get information from the internet and other people, but please make sure you are getting current and accurate info for your province.
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aab1
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« Reply #5 on: February 23, 2012, 08:33:15 PM »

I was wondering, I already run an online business, would the soap business require any additional licenses or anything like that that a regular business doesn't require?

About the insurance it seems like the cost is reasonable, I had heard around $250 per year, does that sound right?

Thanks
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soap1967
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« Reply #6 on: February 24, 2012, 05:19:58 AM »

Depends on how you run the business - a corporation or as a sole proprietor.  You can combine business under a corporation and as with anything there are good and bad things about that. 

Sorry I forgot yo uare in Canada so I am not sure how it works there. 

For insurance purposes might be where you run into your issue.  RLI will insure a home based business that doesn't generate more than 5k in income a year.  If you have a claim they will look at the past two years of receipts.  If you are already generating more than this with the current online business then you can't insure with them (if they insure in Canada).  I run 2 businesses that are related under the same LLC.  In order to have a seperate checking account I had to DBA one of the business with my county office.

Would probably be best to ask an accountant what would be best for tax issues and the like.
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aab1
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« Reply #7 on: February 24, 2012, 06:45:26 AM »

Would it be legal and acceptable to start selling soaps without insurance just for a few months to get an idea of the sales volume I'll get so I can then know which insurance is best for me?

Also is there not a way to insure just my soap business? My other products don't require insurance and my other products sell for well over $5000 a year.

Thanks
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ceebee2001
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« Reply #8 on: February 24, 2012, 08:13:37 AM »

You can sell without insurance or business licences and not pay taxes, but it just takes one person to make trouble for you.  I was asked to put some of my sugar free baking in a store here in town, but they do not have a business licence, are not paying taxes etc.  I refused because I cannot take the risks of them being "raided" .  My catering business is legit and my main income.
« Last Edit: February 24, 2012, 11:06:59 AM by ceebee2001 » Logged
soap1967
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« Reply #9 on: February 24, 2012, 02:16:31 PM »

yes you can insure just your soap business.  I agree with CeeBee it is very risky to run a business without insurance.  You risk jeopardizing your life, family, home etc.   The chances are slim you could get sued but are there.
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brnicholas
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« Reply #10 on: February 24, 2012, 06:47:42 PM »

When we sell wholesale in one of the states where we are registered we always ask for a copy of their tax permit to keep on file. Legitimate businesses will comply immediately. And you have proof that you are not responsible for collecting taxes.

Br Nicholas
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aab1
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« Reply #11 on: February 25, 2012, 01:23:23 PM »

Thanks for the info. Where would I start to look for insurance for the soap business and how much can I expect it to cost? I'm in Canada.

By the way how can I tell which insurance I'll need if I don't know how much money I'm going to make? One post mentioned one that insures business making up to $5000, but I can't predict whether my sales will be $3000 or $20000 so how do I know where to start?

Thank you
« Last Edit: February 25, 2012, 01:25:30 PM by aab1 » Logged

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brnicholas
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« Reply #12 on: February 25, 2012, 03:39:08 PM »

The Handcrafted Soapmakers Guild membership is $500.00 per year and that includes insurance and permission to use their logo and many other benefits. They have an internation membership that is only $100.00 per year but it doesn't include insurance. You might check with them because they are very helpful and they may have a plan for Canada, I don't know. But they will point you in the right direction if they can. www.soapguild.org.

Br Nicholas
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jasonpark12
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« Reply #13 on: February 29, 2012, 08:21:27 PM »

As far as i know, there is no need to get a license if you are going to sell your products online. As long as you comply to the general standard, rules and policies of selling online.

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how do i sell online
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brnicholas
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« Reply #14 on: March 01, 2012, 03:39:59 AM »

What about sales tax. I believe that most states in the US require you to collect sales tax for them if you are operating within the state. My communities mother house is in Natchez, MS, and the parish I'm doing mission at is in Savannah, GA. We are required to collect sales tax for online sales in both Mississippi and Georgia. I don't believe you can get a sales tax permit unless you at least have a business license.

There are also other benefits. We have a contract with FedEx that gives us shipping discounts that are much more than the Postal Service offeres making shipping by FedEx more cost effective on large wholesale orders. Sometimes it is even cheaper on smaller orders. We offer both Postal Service and FedEx but we pass the lower cost on to our wholesale customers and that keeps them happy.

Also, any soapmaking ingredients that we purchase in either Mississippi or Georgia are tax exempt because we collect the tax from our customers and turn it over to the state and while we don't collect tax from our wholesale customers, they do collect it from their customers.

There are exceptions but I don't think selling online is one of them, although it used to be. One exception is selling at Arts and Craft Fairs (at least in the south). At most it is the Event Operator that is responsible for the taxes but they will have forms for you and you give them the tax at the end of the event. You still have to collect it or pay it yourself but you don't need to go to the bother of getting a tax permit.

One other thing, if you sell wholesale make sure your customer has a tax permit and get a copy of it for your files. If they are caught selling without collecting the proper tax it could land in your lap and you could be responsible for selling to them without collecting tax. If the tax representative comes to visit you they will want to see all of this documentation as well as all of your sales data so keep good records.

Now, this is my understanding of how it works in Mississippi and Georgia so do your own investigations. I would just hate to see anyone get into trouble, expecially when heavy fines are usually imposed.

Br Nicholas
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