With home-based businesses and side hustles being all the rage, it’s no wonder I’ve seen a huge increase in emails asking how I managed to start a lip balm business on the small budget of $100.
For my seasoned readers, it’s no secret that that’s exactly how I began my journey in the handmade skincare industry years ago.
- A $100 loan from my personal checking account
- A ‘real’ full-time job (i.e., not a lot of extra time)
- An apartment with just enough room in the coat closet for a printer
- Barely enough counter space in the kitchen (aka my ‘office’) to fit my computer…
…I built a thriving, profitable, scalable lip balm business.
And ‘poof’, here I am. Three skin care product lines, an e-commerce coaching blog, and a decade of experience later, eager to dish out my ‘budget business’ tips and secrets on a shiny, silver platter 🍽.
This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links (at no cost to you). Please read the disclosure for more information.
Why Sell Homemade Lip Balm
A common reader question: “Why are you always so insistent on talking about making lip balm to sell, specifically?”.
Just like any business, it’s all in the numbers.
Yes, you can ABSOLUTELY be successful with any number of handmade skincare products that fit your target market. If initial startup costs aren’t a concern for you, by all means, have a great time building a diverse line!
But if you’re wanting to start a business on a small budget that has a nearly zero risk factor, handmade lip balm has your name all over it.
Let’s begin our discussion with just 5 reasons (out of more than 20 that I could name off right now) that this is a winning product to launch a business around…
1. Low Cost to Make Natural Lip Balm
When it comes down to ingredients, you only need 3-5 butters and carrier oils (depending on the type of lip balm you make), bringing the cost of the actual recipe base down to about ten cents a tube.
For full transparency, that’s just the beginning of pricing your lip balm…you’ll also need to factor in containers, labels, shrink wrap, box filler, shipping boxes, website fees, etc.
However, in terms of initial recipe costs, lip balm has the lowest you’ll find.
2. Global, Unisex Market for Lip Balm
Who doesn’t know what lip balm is or how to use it?
This is by far the most commonly used skin care product on the market, and according to U.S. Pirg, you can find 81% of women and 39% of men using it EVERY DAY in the United States (source).
This isn’t just a US trend – Asia Pacific is the largest revenue share of lip care products, with Europe the second-largest regional market (source).
3. Growing Lip Balm Market
What’s more important for YOU to know, soon-to-be entrepreneur, is that the market for lip balm is GROWING.
In fact, the global market for lip care products is expected to grow at a 5.9% rate between 2021 and 2028 (thanks to more widespread knowledge about the dangers of prolonged sun exposure).
This isn’t just any type of lip balm though. People are wanting natural and organic versions with a greater emphasis on sustainable packaging.
4. Lip Balm is Easy to Create
Another reason to start a handmade lip balm business is that as long as you have the right tools, it is super easy to make. You don’t need to spend any money on formulation courses or get fancy equipment.
The ingredient list is super small, you don’t need a lot of space, and the actual time it takes to make lip balm is lightning fast compared to other recipes. Easy, easy, easy.
5. Infinite Ways to Customize Lip Balm
I don’t care WHO your target market is, there IS a way to brand your lip balm so it fits your unique customer. You have so many variables to work with:
- Scent – with the help of essential oils, you can come up with endless natural scent combinations (I’ll explain how I did that on a budget below).
- Containers – lip balm tubes, lip balm tins, lip balm jars…all available in different materials (plastic, aluminum, glass, paperboard, etc.)
- Labels – between the actual label material, color palette on any graphics and typography, and the fonts you use on your labels, the same exact lip balm recipe can be geared towards a variety of audiences simply based on visual branding choices.
- Website – selling lip balm goes way beyond the tube you make in your kitchen. Your website will also play a huge role in your customer’s experience and determine whether or not they click the ‘buy button’. We’re talking:
- Production descriptions
- Product photography
- Overall website design
Is Selling Lip Balm Profitable?
I’m sure you’re wondering if after the ‘extra’ costs (such as labels and website fees) if handmade lip balm is still actually profitable and worth creating a business around.
As long as you price your products correctly from the beginning (which is the BIGGEST pitfall of most handmade business owners) and know how to market yourself, you’ll make a profit (obviously assuming you have a quality lip balm recipe).
Once your business is off the ground and making money, you’ll be able to purchase larger quantities of raw materials, bringing the cost of each unit down further while keeping your retail price the same.
Your profits should only go up over time if you are using your ‘business brain’ along with your ‘creative maker brain’.
Types of Trending Handmade Lip Balm
We know from the analysis reports above that if you’re starting a lip balm business right now, a natural version is the way to go.
Even within this ‘chemical-free’ segment, there are still several directions you could take that are trending:
Beeswax Lip Balm
Beeswax lip balm is popular because of its options for 100% organic ingredients and high melting point. This is necessary if you’ll be making and shipping to warmer climates.
Vegan Lip Balm
The demand for vegan products is increasing in the U.S. specifically, so this could be a great direction to explore.
Keep in mind that most individuals in this target market are also looking for sustainable options, and it would be a challenge to start a lip balm business for under $100 with eco-friendly packaging.
Tinted Lip Balm
Tinted lip balm is also getting a boost in sales thanks to the ‘no makeup makeup’ look.
Though popular, this would be more of an ‘add-it-on-later’ product to your line if you don’t have an audience yet; lip color will narrow down your possible customer base while increasing material costs for the colorants (micas and/or alkanet root).
My two cents? Keep it simple and keep costs low by sticking to a beeswax lip balm base.
Need a winning handmade lip balm tutorial?
This tried-and-true organic beeswax lip balm recipe has earned me THOUSANDS of dollars in revenue and an over 50% repeat customer rate (for comparison purposes, the average repeat purchase rate for ecommerce companies falls between 20 to 40%).
Ingredients & Supplies for Starting a Lip Balm Business on a Small Budget
In my organic lip balm recipe tutorial, I have a list of the supplies and ingredients I recommend to full-time skincare entrepreneurs.
I stand behind all of the products I link to (you can find the same exact ones in my own work space), but there are ways around these items/costs when you’re needing to start a lip balm business on a small budget:
I currently use this double boiler for all of my skin care recipes, but when I was first making lip balm, I used a saucepan from my kitchen and a stainless steel bowl I found at the dollar store.
~$1.25 (up to $1.25 of $100 budget)
I swear by my current kitchen scale and use it for my recipes and shipping products, but again, this may be something you have to work up to. You can start with a cheaper kitchen scale like this, but upgrade when you can – you get what you pay for and want to make sure your measurements are consistent.
~$10 (up to $11.25 of $100 budget)
You’ll want a pack of stir rods once you begin making several different recipes at a time. Until then, you can absolutely get away with just having ONE that you can find at Target for a dollar or two on the discount end caps.
(Bonus points if you can find a glass cocktail stirring rod with a cute little decoration on top like this mermaid tail. Check those sale sections!!!)
~$2 (up to $13.25 of $100 budget)
You can never have enough pipettes as a skincare maker, which is why I usually recommend this larger set of 200. However, when on a budget you don’t need that many to begin with and can save a few dollars by getting a smaller set of 100 (3 mL) pipettes.
~$8 (up to $21.25 of $100 budget)
This lidded ramekin set is awesome if you’re prepping several batches of a recipe ahead of time. When you’re making one batch at a time and are just using it to help measure ingredients on the scale, grab a single, cheap glass dish from the dollar store.
~$1.25 (up to $22.50 of $100 budget)
If you want a quality recipe and return customers, there’s no cutting corners with ingredients. Quality is important. I like this organic beeswax, but there are many to choose from online – there are yellow and white options.
~$15 (up to $37.50 of $100 budget)
Same as above. Stick to quality organic shea butter. If you end up getting a different kind, just make sure it’s unrefined to get the best results.
~$15 (up to $52.50 of $100 budget)
When you’re purchasing your organic coconut oil, make sure it is the 76° F type that is solid at room temperature (there is another type called fractionated coconut oil that always remains liquid).
~$7.50 (up to $60 of $100 budget)
In my Natural Skin Care Recipe Book, I provided 24 different lip balm scent combinations with essential oils. You absolutely do NOT have to have that many in your shop to do well.
When I first started, I had 7 different scent combinations from just 3 small bottles of essential oil:
- Unscented (fragrance free, no essential oils at all)
- Simply Lavender (only organic lavender essential oil)
- Simply Mint (only organic peppermint essential oil)
- Simple Orange (only organic orange essential oil)
- Lavender + Peppermint
- Lavender + Orange
- Orange + Peppermint
~$25 (up to $85 of $100 budget)
*Budget Business Tip: I offer the option for custom scent blends on bulk orders – if a customer wants a scent that I need a new type of essential oil for, I build that into the price of the order (being fully transparent with the customer, of course) and *boom* a new bottle of essential oil paid for…PLUS a new scent blend to add to the ‘regular’ product line.
Tubes are the best-selling type of container, and this set of 50 lip balm tubes is a great price to get started.
~$8.50 (up to $93.50 of $100 budget)
Printing your own labels at home is definitely the way to get started – professional printing has a pretty hefty bill with small quantities. Get a small pack of tamper-proof lip balm labels like this and only print what you need for product photos, and then only as needed for incoming orders.
~$5.50 (ending at $99.00 of $100 budget 🎉)
More Tips for Building a Lip Balm Business on a Small Budget
The costs of making lip balm go beyond just the recipe, but you can still be thrifty at the beginning of your business journey.
You’ll want to upgrade some of the ‘short cuts’ below as your business and branding develop over time to give yourself a professional edge.
If you’re going to sell lip balm online, you need to have access to a desktop computer. It doesn’t need to be fancy. You could even use one at the library for free.
Graphic design program
I started my lip balm business before the days of PicMonkey and Canva. I did just fine by designing my labels in Microsoft Word, so you don’t technically need a graphic design program at all.
That being said, Canva is an amazing free site that has tons of tutorials and templates (which can be used for your labels, website graphics, and creating online marketing visuals).
Having your own website as an established business is worth the cost once you have consistent sales coming in. The cost of a custom domain plus the website fee is about ~$350 annually, depending on your host.
That may seem like a lot, but having your own e-commerce site brings down transaction fees, listing fees, etc. and makes sense when you have hundreds of sales a year.
Until then, choosing a marketplace such as Etsy is a great way to start a lip balm business on a small budget. Creating a ‘shop’ on Etsy is free, and you only pay 20 cents per listing (keep in mind that this doesn’t include any fees that you will incur when you make a sale).
*If you decide to go this route and have never had an Etsy account before, you can get your first 40 Etsy listings for free by clicking here.
Printer and Ink
If you don’t have a printer at home OR the labels you get require a different type of printer, don’t forget about your local office supply store.
You can provide the printing department with a digital version of your labels and they can print them for you for about $1 a page (much cheaper than purchasing a brand new laser printer!).
If you just need a basic printout of a shipping label or invoice, you can print those out at the library for around 10 cents a page.
You know what can be expensive? Shipping materials.
Story time. I just so happened to work at a department store when I was first starting my lip balm business. The shoeboxes that Toms® used at that time were PERFECT shipping boxes, and I’d leave at the end of the day with bags of them (the security team that had to check to make sure the boxes were empty were NOT very fond of this practice…but don’t mess with a girl on a business mission!).
The whole point being, you can absolutely reuse old shipping boxes for your orders…just make sure to note this on your site somewhere (“Your order will be shipped in a pre-used box…thanks for helping us love the Earth!”).
If you end up building a luxury brand down the road, make sure you upgrade to shipping materials and packaging that matches what your customer would expect from a higher product price point.
Business Cards & Thank You Notes
Some people say that business cards are a must-have shipping inclusion. They do add a touch of professionalism if your budget can handle it, but they’re not necessary at the beginning.
What IS necessary (and a major factor in getting return customers) is including a sincere thank you note with every order.
I used this set of printable note cards for YEARS as a super affordable ‘thank you note’ option. I printed my logo at the top and social media handles at the bottom, which removed the need to include a business card as well.
If there’s no room in your budget for printable cards, you can even write a personalized ‘thank you’ directly onto the packaging slip that you can print with your shipping label.
This extra detail WILL stand out and make you memorable.
Photo Shoot Tips
Congratulations on starting your lip balm business in a time where cell phones have legit amazing cameras built in!
If you have a phone and a window with filtered sunlight, you’re all set to take your product photos.
Eventually, having a photo tent like this can come in handy for consistent lighting (that’s what I’m using in the picture of myself below).
Props can get a bit pricey if you are wanting to use botanicals and other ‘fresh-looking’ details. Consider alternatives, such as the dried herb kit I purchased back in 2012 to use in my product photos. I store them in a plastic tub and they’re still in great shape and handy to this day.
How Bulk Orders Scaled My Lip Balm Business
Time for the real business-building secret.
The best way to build a business, even in the age of computers, is by word of mouth.
I’m not lying when I say that people LOVE this lip balm recipe, and once they get a tube, they come back for more. So the issue comes down to getting those tubes INTO THE HANDS OF ALL THE PEOPLE.
Enter the power of bulk orders.
Let’s say someone purchases a bulk order of 50 lip balms from your site to use as wedding shower favors. Even though they got a custom label (“❤️ Mike + Christine, 6/12/2022 ❤️”), you still include your website url somewhere.
You now have 50 random people that didn’t know about your site before that are using your lip balm every day and have your info on hand when their tube runs out.
They come back to order a few for themselves (and for gifting purposes), but then also want to use your custom label services to use as a promotional item for their business.
You never know when it will fall into the hands of a company that wants to order a MASSIVE amount, such as the order I received for 1,500 custom label lip balms shown below:
Bulk Order Tips for a Small Budget Lip Balm Business
I’m sure you’re thinking, “If I need to purchase bulk quantities of tubes and ingredients, this is VERY different than your promise of starting a lip balm business on a small budget.”
And my response is simple: just build in a 2-3 week processing time (or more, depending on the order size).
Take the same product photo of one lip balm and list it in singles, sets of 3, 25, 50, 75 and 100.
After the bulk order payment goes through, order any extra ingredients and supplies that you need.
When you take the time to price your bulk listings correctly, eventually you will be able to buy supplies in bulk to increase your profit margin.
If you want to offer other custom details, such as the gift box and ribbon I have in the photo below, you can also do this on a budget!
- Don’t be shy about asking bulk packaging companies to send samples – I had one small jewelry box sample like the one below to use in a product photo as a gift wrap option for large orders, and I didn’t purchase any until I got this bulk request for 500 boxed-up lip balms.
- Simply purchase a sample size variety pack of ribbon and list the colors as options on your site, only purchase the larger size spool as customer requests come in.
Example Lip Balm Listings for Inspiration
Not convinced you can create an entire business with JUST lip balm?
You’d be amazed at how many different sets you can offer to make your website look ‘full’ without the addition of other skincare products.
In my first product line, I had:
- Lip balm singles
- Mix and match sets of 2
- Sets of 3, 6, and 10
- Custom label bulk orders of 25, 50, 75, and 100 for baby showers, wedding showers, and business promotional items
- Seasonal lip balm sets
- Tea lip balm sets
- Herbal lip balm sets
- Lip balm subscriptions (monthly, quarterly, annual options)
Checklist for Your Lip Balm Business
All of the above tips and tricks for starting a lip balm business on a small budget was just to get you started.
To make sure you’re setting yourself set up for success, also visit the Handmade Skincare Business Startup Checklist to walk you through the process in detail.
Be sure to request access to our private community Facebook group, DIY Skin Care Biz, where you can ask questions, get feedback, and be inspired as you grow your handmade business!
Grow Your Skin Care Business!
Browse through the resources below to boost your handmade business visibility and profitability!