Place 1 teaspoon coconut oil in a microwave safe container. Heat in the microwave for 10 to 15 seconds. Stir until completely melted. Set aside.
In a small bowl, stir together the Kool Aid powder and sugar. Add 2 to 3 drops of water just until the color is bright and a paste forms.
Mix the Kool Aid paste into the solid coconut oil. Mix together until well blended. Add the liquid coconut oil a few drops at a time just until the lip gloss is thin enough to be squeezed into a dropper.
Fill the lip gloss containers with the liquid lip gloss.
Allow lip gloss to solidify at room temperature or cover and place in the refrigerator.