It sounds impossible to start plastic business with only $200,000 in the US. Actually, you can, but this number does not count the stocking cost. In this article, we will provide you with a step-by-step guide on how to start a plastic houseware business in the US with specific examples.
1. Why Choose Household Products to Start Plastic Business?
There are many reasons why you should choose household items to start plastic business:
- Consumer appeal: Features like safety, and ease of use make plastic products attractive to consumers. Plastic is indispensable in modern life, making it a product with consistently high demand.
- Growth potential: The packaged-food industry’s reliance on plastic highlights the potential for expansion and profit.
- Plastic advantage: Plastic is well-known for lightweight, durable, various designs, innovation and convenience.
- Prospect market: According to Verified Market Research, in the US, the plastic household item market will grow from its 2023 value of $80 billion to $103 billion by 2031, demonstrating a consistent annual growth rate of 6.3%. The U.S. plastic household item market thrives on innovation, affordability, and consumer demand, offering diverse products for daily living.
So, plastic housewares bring great potential to start plastic business. In the age of integration, importing plastic from other countries to the US market is a good idea to save money as the foreigners’ cost of production may be lower. Importing from Vietnam is highly recommended because Vietnam plastic market is growing, thanks to low cost labor, low cost of production, but innovative product designs.
2. Step-by-step Guide to Start Plastic Business of Household Products
Step 1: Come up with an idea
All businesses start from an idea. A good business idea comprises 4 elements:
- Novelty and uniqueness: In the market economy, novelty and uniqueness are important factors that help businesses become different and impress customers. If you do the same as existing businesses, it will be difficult for you to succeed if you are not a pioneer.
- Feasibility: Feasibility is the correlation between business ideas and actual conditions. A good idea must revolve around actual needs to become a good business idea.
- Usefulness: Answer the question of whether your business is useful. Does the business solve the customer’s problem? And will it help in the short or long term?
- Superiority: Not only being different, to start a plastic business, your business idea needs to demonstrate the superiority of the product or service compared to what is currently on the market. If the idea is not superior, you will not be able to compete with other competitors who are already well-known in the market.
Step 2: Do a lot of research
To start a plastic business, doing research is important. For any business, doing research does not only help you to understand the market but also help to come up with more ideas.
When doing research, make sure you get a comprehensive understanding about:
- Target market as a whole
- Competitors and competitiveness
- Target audience
- Potential partners
- Licensing and legal issues
- Human resources
But how to do research effectively? You can leverage the development of digital market analysis tools such as Google Search, Google Trends or Google Alerts, where you can find numerous data on a click. Beside secondary data found on the internet, you can also conduct surveys or interviews to get objective primary data on the target market. The more you research, the more risks you can avoid.
Step 3: Choose a platform or location
After researching and getting an insight on the market, you must decide on which platform or location to start plastic business. If you want to do online business, you must follow the rules of each platform. There are some popular online platform you can start your business:
- E-commerce platform (Amazon, eBay, Walmart, etc.)
- Website
- Social media (Facebook, X, TikTok, Instagram, etc.)
If you start plastic business with traditional brick-and-mortar stores, it costs you more money, time and effort. You must balance between the geographical condition and the cost of hiring a place to do business.
Step 4: Decide on business size
It’s you who understands your knowledge, experience, financial strength and resources. Your business size depends on these factors. If you are brandnew in the field, you’d better take a step-by-step process, from a small business to a bigger one gradually. You always have chances to expand your scale, but you’ll suffer if you start with a bigger-than-reality plan.
Step 5: Register for permission and license
To start plastic business or whatever, it’s mandatory to take permits and licenses. This is primarily to protect your business legally and also prevent you from legal troubles. Popular documents required in the US may include GST registration, permits, licenses. You must visit government offices to be consulted because it depends on specific circumstances. When your paperwork is permitted, you can start your business.
3. Expenses to Start Plastic Business
It is estimated that you need at least $200,000/ year to start plastic business in the US. These costs often include the Business formation fees, Insurance cost, and Operation cost. Below is a detailed explanation for this number.
| Type of cost | Cost |
| Business formation fees |
$50 – $500 |
| Insurance cost |
$600 – $1670/ year |
| Operation cost |
$225,600 – $1,220,400/ year |
| Minimum cost |
~ $226,200/ year |
3.1. Business Formation Fees
Formation fees
Formation fees vary from $50 to $500, depending on the type of your business. Some common business types are:
- Limited Liability Company
- Limited Liability Partnership
- S-Corporation
- C-Corporation
- Partnership
- Sole proprietorship
License and permit fees
The cost for license and permit can range from $200 – $2000. The variations vary due to your type of business and the state of operation. To legally operate in any place, the business needs to hand in some documents. These are some common paperwork:
- Wholesaler licenses
- Resale certificate (if you do not sell exclusively independent products)
- Resale certificate (for those who do not sell exclusively independent products)
- Vendor’s license
- Certificate of occupancy for your retail space
- State and local licenses as specified by the SBA
- Employer Identification Number (EIN) for tax purposes
Lawyer fees (Optional)
The cost paid for a US business lawyer is between $100 – $400/ hour, which is not cheap. But to start plastic business of plastic products, you may need the help of lawyers and business professionals to complete the paperwork.
3.2. Insurance Cost
Professional liability insurance
Widely known as Errors and Omissions (E&O) insurance, this insurance is to protect small businesses from the financial risks. The average cost is $60 per month or $720 per year.
Business interruption insurance
Business interruption insurance helps your plastic business replace lost income and pay the operating expenses for the difficult period that is unable to operate. The Business interruption insurance includes lost income, mortgage, loan payments, rent fees, salaries, taxes, training cost, etc. Business interruption insurance’s cost is about $40-$130 per month or $500 – $1500 per year.
Commercial property insurance
Commercial property insurance prevents your plastic business from loss due to natural disaster, or theft. The average cost is $63 per month or $755 per year. Be noted that the Commercial property insurance has a $60,000 limit and an average deductible of $1,000.
In conclusion, it takes about $600 to $1,200 a year for a plastic business owner to be comprehensively insured and an additional $1,070 per year for employees’ compensation coverage. The insurance cost depends on building size, location, revenue, size of payroll, etc.
3.3. Operation Cost
Cost of plastic products
It’s impossible to calculate the investment on the cost of total products in your inventory because it depends on your business scale and the source of plastic products. Inochi is a leading plastic houseware supplier from Vietnam, offering premium products from under $1. Contact Inochi if you want to find a reliable supplier to start plastic business.
Retail place & Office space expenses
If you want to open a brick-and-mortar location for plastic products, you have to pay for the rent, which is the most expensive part of total operation cost.
The cost paid for renting space is also the most varied. For example, a lease in the center of Manhattan may cost over $80,000/ month, while a store in Florida may cost less than $1,000/ month. Besides, you may also need to allocate up to $1000 for building improvements and remodeling.
Marketing costs
According to Online You Grow, for small to medium-sized plastic houseware brands, a monthly marketing cost might be between $300 to $3000. But marketing depends so much on your choice, but the recommended budget allocated for marketing is 12%-20% of gross revenue in the first year and then dropping to 6%-12% in the next year.
These are some common marketing channels you can opt to run. However, you do not need to invest on all channels:
- Digital channels: Social media advertising, Google advertising
- Traditional channels: Flyers, posters, newspaper, OHH
Labor expenses
The cost of labor in the US depends a lot on your business size. But there are some common roles to operate a plastic business:
- Sales associates: $3400/ month
- Cashiers: $2000/ month
- Store managers: compensation of $3700/ month
- Inventory control specialists: $4100
- Marketing specialist: $4300/ month
Software expenses (Optional)
Cost for software can vary from $25 to $200. They include Payroll software, Project management software and Accounting & invoicing software.
To sum up, the total minimum cost to start plastic business is about over $200,000/ year. However, this does not include some costs like stocking, utilities and supply. You can start a plastic business with a very humble budget of $200,000, but it’s risky and definitely not easy. So the actual cost will definitely cost you more. To stand more chances of success, it’s advisable you invest more than the minimum cost estimated. You can increase the capital by partnering, calling for investment, borrowing money from banks, or just asking for support from the supplier.
In a nutshell, the article has guided you on how to start plastic business selling houseware in the US with only $200,000. Feel free to raise your questions on whatever you are not clear enough. If you intend to run a plastic houseware business, please contact us for the full catalog with the best price and detailed support.
