Selling shampoo bars is a great small-business idea, but before you make your first sale you’ll need the proper licenses and permits. There is no single federal “shampoo bar license.” Instead, you’ll typically need a mix of a general business license, a sales tax permit, and possibly local home-business or zoning approvals - plus compliance with FDA cosmetic rules.

1. Choose your business structure and register your business

Your first step is to decide whether you’ll operate as a sole proprietorship, LLC, partnership, or corporation. Many small sellers start as a sole proprietor and later form an LLC for personal liability protection. Register your business name with your state, and file a “doing business as” (DBA) if you use a name other than your legal name.

2. Get an EIN if required

You may need a federal Employer Identification Number (EIN) from the IRS if you form an LLC, hire employees, or file certain tax returns. Even if not required, an EIN is useful because it keeps your Social Security number off business paperwork.

3. Obtain a sales tax permit or seller’s permit

Because shampoo bars are tangible products, most states require you to collect sales tax. Apply for a sales tax permit or seller’s permit through your state’s department of revenue or taxation. This permit lets you collect and remit sales tax, and it may also allow you to buy supplies tax-free for resale.

4. Get a local business license

Most cities and counties require a general business license or tax certificate to operate. Contact your city or county clerk’s office or use a tool like SBA.gov or your state’s one-stop business portal. If you work from home, also ask about a home occupation permit and check your zoning rules. Some landlords and HOAs have additional restrictions.

5. Check state-specific cosmetic or manufacturing requirements

Shampoo bars are cosmetics under U.S. law. The FDA does not require a federal license or premarket approval to sell cosmetics, but it does require that products be safe and properly labeled. However, some states - such as California - require cosmetic manufacturers to register or obtain a cosmetic manufacturing permit. Check with your state’s health department or food and drug branch.

If you are reselling finished shampoo bars made by another company, you still need the business and sales tax licenses, but the manufacturing compliance burden generally falls on the manufacturer.

6. Follow FDA labeling and safety rules

Your shampoo bar labels must include:

  • Product identity: what the product is
  • Net quantity of contents
  • Name and address of the responsible party
  • Ingredient list in descending order of predominance
  • Any required warnings

Keep records showing your product is safe under normal use. Avoid making drug-like claims - such as “treats dandruff,” “cures eczema,” or “regrows hair” - unless you are prepared to comply with FDA drug rules.

7. Consider product liability insurance

Even though it is usually not a legal license, product liability insurance is strongly recommended for anyone selling personal-care products. It can protect your business if a customer has an allergic reaction or claims your product caused harm.

Where to apply

  • Business name and entity: Secretary of State or state business filing office
  • EIN: IRS.gov
  • Sales tax permit: State department of revenue or taxation
  • Local business license: City or county clerk, finance office, or planning department
  • State cosmetic requirements: State health department or food and drug branch

Costs vary widely - from under $50 for a basic local license to several hundred dollars for LLC filing and state permits. Most licenses and permits must be renewed annually or biennially, so set calendar reminders to stay compliant.