I made 10 wooden soap dishes for a relative. I used cedar from a scrap 4×4 post. These are easy to make as Christmas gifts or to sell at craft shows or on Etsy. I’ve seen people sell tons of these on Etsy for 4 or 5 bucks a piece.
I would not recommend using cedar as it’s very brittle and very soft, which makes it almost impossible to make these without blemishes. I used poplar a couple of years ago and those have held up just fine.
You have to cut the grooves so that they overlap and give airflow to the bottom of the soap as it sits on the dish so that it can dry. This is especially important for any handmade soap and will make it last longer.