If you’re making your own lip balm, the idea of making a profit from it can be exciting. However, selling homemade lip balm can get tricky once you start bringing legal concerns into the mix. However, it’s as complicated as one might think.
Yes, it is legal to sell lip balm. You can start selling almost instantly on an online marketplace like eBay or Amazon. You don’t really need a specific license outside of a general business license and an EIN (Federal Employer Identification Number). In some areas and states, you might require to have a Zoning permit.
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In this guide, we will walk you through all the steps in order for you to start making money off of your handmade lip balm legally. We’ll discuss what your primary considerations should be before selling any kind of product online, license requirements, as well as where you can sell your lip balm.
By the end of this article, you’ll know exactly how to sell not just lip balm but all types of homemade products online. So, let’s get started!
Is it legal to sell homemade lip balm?
Legal guidelines vary depending on the country you live in. Generally speaking, you don’t need any type of permission (such as the government’s) to sell homemade lip balm. However, you are responsible for its contents. This means that you aren’t allowed to adulterate or misbrand your products.
As an example, if you’re based in the USA, it is your responsibility to ensure that any product you create and then sell to the general public meets the country’s quality standards for the respective product. We’ll talk more about the regulations later on.
Do you need an LLC for homemade lip balm?
Limited liability companies — or LLCs — are legal entities necessary in several business scenarios. They provide structure to the business and prevent the owner from acquiring personal liabilities against any debts that the business may have.
There are some cases where an LLC is not needed, such as selling on websites like Amazon, eBay, or Etsy. You can easily buy and sell items in different online marketplaces without acquiring a business license or starting a formal business.
But while you don’t need an LLC to sell homemade lip balm, you may want to acquire one in the long term. This will make it much easier to grow your business if it becomes successful in the future.
How to know when an LLC is necessary
Suppose you’re selling lip balm without an LLC. In this scenario, any claim or liability of your startup will end up being personally liable. This can lead to significant problems once your business starts acquiring more presence.
With that being said, an LLC isn’t going to be at the top of your to-do list if you’re just starting, but we recommend using the Lean Startup Method. This method focuses on proving that your idea works (and is profitable) before you invest a considerable amount of money in it.
Furthermore, if you’re making a small income, the government isn’t going to be interested in your business. Later on, however, when your business has made its mark and continues growing steadily, you may want to get an LLC and report your income to your respective country’s governing entity. For example, the IRS, if you are located in the US.
Do I need a license to sell lip balm?
You don’t need a license to sell lip balm or any other product at online marketplaces like eBay or Amazon. All you have to do is sign up, and you can start selling.
Just remember that cosmetic products are regulated in most countries differently, and you may need proper licensing to sell certain goods.
While you’re not required to obtain a specific permit to start selling homemade lip balm, you are required to obtain a general business license (we’ll go over this in greater detail below). Furthermore, the FDA regulates cosmetics, and lip balm falls under this category.
According to the FDA’s Small Businesses & Homemade Cosmetics page, while you don’t need a license, the product needs to be appropriately branded and mustn’t be adulterated. Furthermore, any product with color additives needs to be approved by the FDA before being sold.
For those in the US, we highly recommend going to the FDA website to get informed about all regulations concerning cosmetics.
Also, if you’re based in the US, you can take part in the Voluntary Cosmetic Registration Program. Registering will afford you certain advantages, such as the following:
- You, along with all registered merchants, will receive information regarding ingredients that are non-approved by the FDA.
- You will also receive data regarding the safety of ingredients involved in manufacturing cosmetic products.
- Your company will be certified a “responsible cosmetic business.”
There are more benefits to joining this program. You can read about them by visiting the FDA website.
If you’re based in Canada and would like to get started in the lip balm business, these are the two main guidelines you should know about:
- Food and Drugs Act
- Cosmetic Regulations
Additionally, it’s helpful to look into the Hazardous Products Act and the Consumer Packaging and Labelling Act and Regulations. We also highly recommend reading the Consumer Chemicals and Containers Regulations to verify that all the ingredients you are using are permitted.
NOTE: In Canada, all cosmetics are regulated by Health Canada. Therefore, if you’re planning on selling homemade lip balm, you are required to notify this entity. Unlike in the USA, this process is obligatory for all merchants.
Licenses and Permits Needed to Sell Homemade Lip Balm
You are required to possess specific documentation to be able to sell homemade lip balm. This includes the following licenses and permits:
- General business license
As mentioned above, US-based sellers are required to possess a general business license. This documentation is not hard to get. This “business license” is nothing more than a tax certificate.
Remember that regulations differ depending on the city, town, or country. Although you can acquire the information on your own, you can always contact a tax collector to learn everything you need about tax certificates and licensing.
- Zoning permits
Depending on your area of residence, a zoning permit may be required to ship lip balm. Zoning areas are common within the US. In other words, while it’s fine to sell and ship goods in specific locales, it might be forbidden in others. If you engage in commercial activity in a zone where it isn’t allowed, you could face legal problems.
- Federal Employer Identification Number or EIN
The Federal Employer Identification Number, or EIN, is similar to the social security number in the sense that it helps the government identify and track your business. It isn’t hard to obtain, as you can go through the whole process via the Internet.
An EIN isn’t necessary if you’re a sole business owner. However, we highly recommend acquiring one. Otherwise, you’ll be obligated to use your SSN every time it’s required. For instance, your SSN is often requested when you’re submitting the W-9 form as a freelancer.
If you have registered your business as an LLC or a different business structure and if you have employees, you must be registered within the EIN.
- Permits for commercial signs
Commercial signs may give your business the little push it needs to grow its customer base. In this case, different rules apply based on your area of residence. Try to get to know as much as you can about the guidelines regarding commercial signs in your local area.
How do I sell homemade lip balm?
There are many creative ways to market and sell your homemade lip balm. Where to sell and how to get started will be explained later. However, there are numerous ways to sell lip balm. For instance:
- Individual package – If you’re just starting, you can sell homemade lip balm as an individual product. If you put good effort into the packaging and create a smart marketing approach, you can experience considerable growth in little time.
- Bundles – Instead of a single product, you can sell three or four items. For instance, you can market the bundle as a package that lets the user mix different fragrances. Plus, it’s a good idea to offer discounts if they are buying more products.
- Bulks – Selling in bulk has always been popular, so you should always keep your doors open to it. You can create a bulk package of 50 products of the same scent or 10 products of 5 different scents.
- Bundle with other cosmetics – If you know how to make other cosmetics besides homemade lip balm, use it to your advantage. You can sell different types of products together as a bundle, offering different prices based on various factors (e.g. prices of the ingredients involved in the recipe, the time spent during the manufacturing process, etc.).
You don’t have to choose one method and shouldn’t stick to a single one. Offering variety in how you sell your products is more attractive to the clientele and opens new doors.
Is the lip balm business profitable?
Yes, it is.
Statistics have revealed that the lip care market will achieve $1.17 billion in 2025. The same study found out that the industry is growing at an approximate rate of 7.2% yearly. Another study found that 65.9% of the population uses lip balm every day. You can also take a look at Google Trends and see how the interest in lip balm has risen considerably throughout the years.
A business in this industry can be really profitable if you’re willing to put effort into it. Here’s how you can get started with a small homemade lip balm business.
How do I start a small lip gloss business?
As with any other startup, most business decisions (like the marketing strategy) will be based on personal factors like your time, availability, and location. However, these are some effective ways to get your business started with the right foot.
Where to sell homemade lip balm
There are plenty of ways to get started with selling homemade lip balm. But because the pandemic has significantly complicated the way businesses currently work, the best way to sell your products would be via online marketplaces. Nowadays, you have tons of options for your startup. Some of the most popular choices include Etsy and Shopify.
Selling products online is easier now more than ever. Web development tools have become accessible to everyone, which means that you don’t need to be a technical expert to build a website. Even website builders are specifically built for selling products online, making the whole process a lot easier and smoother.
On top of that, Instagram and Facebook have integrated marketplaces to post different items and obtain visibility simultaneously. Thanks to social media, tons of brands have seen exceptional growth. In the case of homemade lip balm, Instagram is a better option as it’s more centered around (but not limited to) photos and videos.
Marketizing your homemade lip balm products
Marketing is largely subjective — you’ll have to evaluate different variables and go for the most viable option for your business’s current situation.
- Social media, email marketing and SEO
If you’re up to selling homemade lip balm on social media, you can leverage the algorithm of these sites to your advantage. Creating and promoting a good image for your products and collaborating with influencers will help you gain visibility.
As mentioned before, Instagram is one of the best choices due to its accessibility. However, Pinterest, Snapchat, and even email marketing can do wonders with proper execution.
But creating your own website is also an excellent option. A website doesn’t have to function as a store exclusively. You can also use it to attract new customers by improving your website’s SEO (search engine optimization).
While digital marketing is the smartest and safest option at the moment, remember that your product exists within your environment and that you have a whole world surrounding you. Thus, not taking into account the potential in-person sales you can have is a terrible mistake.
If you’ve decided to sell homemade lip balm, think about ways to make a name for your product while making sustainable profits. A way to do this would be to find wholesale customers and create a distinct branding for your product, for instance. Another aspect that customers look for a product is its uniqueness factor, or what it has that other products do not.