So you have decided to turn your love of candles into a business. It can be a daunting task working out the business side of selling candles.
Even if you have no idea how to sell candles that don’t mean you can’t be a success.
“Every minute you spend in planning saves 10 minutes in execution; this gives you a 1,000 percent Return on Energy!” ― Brian Tracy
Lots of planning and preparation will help increase your chances of becoming a success. Let’s take a look at what all goes into selling candles.
Table Of Contents
You have a lot of options when it comes to selling candles, many of these platforms did not exist 10-15 years ago. So now you have more ways to make your business successful than ever. Let’s take a closer look. How to sell candles?
Sell candles by listing them on Etsy, eBay, farmer’s markets, consignment, wholesale, social media, or your own website. Start with the locally owned and independently-owned stores and shops in your area and offer to wholesale them or sell them on consignment.
Etsy costs $ .20 to list an item. Once the item sells, they will also charge you a 3.5% transaction fee. We’ve included this listing fee in our calculations you will see later on in this post.
The basic fee for selling on eBay is 10%, but businesses pay 2%.
This one requires quite a bit of work. You have to get the gear to setup at a farmers market and then transport the goods to the specific time and place to sell your candles.
Where I live farmers markets typically only occur once a week, but if this is going to be your strategy, you need to look in to farmers markets in neighboring cities and counties.
Doing it this way you will spend 3-4 days a week on the road selling candles and the rest of your time making them.
You can expect to pay roughly $ 25.00 / weekly for a booth at a farmers market.
Selling on consignment generally costs you 25%-50%. If your costs + margin are $6.00 or $8.00 then the consignment shop should list your candles at $8.00 or $12.00.
You will get your margin and they will get their fee.
If you sell your candles wholesale you will be selling them at a lower margin and make up the reduced earnings with the volume of candles sold. Here are some examples.
Selling 500 Candles Wholesale
Your Cost Per Candle = $3.50
40% Margin Per Candle = $1.40 profit per candle.
Wholesale Price = $ 4.90 per candle
Total Profit For 500 Candle Wholesale Deal = $700.00
Retailer will likely sales your candles at $10.00 each
This means you are buying all of the material required, paying yourself or an employee at least $15.00 per hour and still profiting $700.00 from the deal. If you can gain 4-5 wholesale accounts it will also save you money in marketing.
You can make a company Facebook page and list your candles in Facebook marketplace and in your local community yard sale pages. You can also try Facebook ads, but we will get to that in the marketing section.
If your candles are beautiful eye catching candles that people will not be able to resist when they see, then Pinterest might be the way for you to sell them. You can pin photos from your sales pages and post buyable pins.
You can create an online store through Shopify, Squarespace, get a domain, and direct people to your Etsy store. You can also get a domain, hosting, and set up a website with WordPress with e-commerce plugins.
If you do not know how to do that, you can hire someone on Fiverr.com to do it for you.
What Do You Need To Start A Candle Business
You can keep your startup costs low by working with what you have. You do not need to buy a huge presto pot if you have some old pots and melting pots you can use for a double boiler system. In addition, you can find these old pots, thermometers, and measuring cups at your local goodwill for only a few dollars each. What do you need to start a candle business?
To start a candle making business you need to get candle making equipment and candle making supplies. You can get the required items with an initial investment of approximately $500. However, this number can be lower if you already own items such as melting pots, thermometers, burners, and kitchen scales.
Hitting up your local thrift stores or goodwill locations can help you save a few hundred dollars when getting into the candle making business. Later when you are selling dozens of candles per day you can invest in something like a presto pot with a spout, you do not need one from the start.
How To Price Homemade Candles
Pricing can vary slightly depending on what type of candles you are selling and whether you are selling them online or wholesale locally. How to price homemade candles?
Price your homemade candles by calculating the Cost Of Goods Sold (COGS) and then adding 100%-400% markup for profit. The cost of goods sold includes the cost of wax, containers, wicks, fragrance, dye, labor, and other overhead such as rent, utilities, and insurance.
If you are making candles that cost $10 each to make then your profit would be $2.50-$5.00 per candle. This will give you a final price of $12.50 – $15.00 per candle. If you are making 30 candles at a time then you are looking at $75.00 – $150.00 of profit per batch.
Keep in mind your cost per candle will drop the more candles you make. This will either increase your profit or give you the opportunity to drop your price per candle. This is called economies of scale.
In economics, economies of scale are a cost advantage experienced when production increases allowing the cost per unit to decrease. This is because the more you sell, the more jars, wax, and wick you will order. The more you order the bigger your discount will be per shipment.
Understand Your Costs
Variable costs are costs that can change, some of these costs include:
Fixed costs are the costs that never change, some of these costs include:
- Listing Fees
Now we understand what will be included in your costs.
Estimating Costs On 60 Candles
Let’s do an example for a batch of 60 8 oz mason jar candles and see what our costs are. We will do this estimate with supplies from Candle Science.
Estimated Variable Costs For Candle Making
These are the fixed cost estimates for a batch of 60 8 oz mason jar candles.
|Variable Cost||Cost Per Unit|
|Wax||$ .72 / each|
|Oils||$ .48 / each|
|Jars||$ .58 / each|
|Wicks||$ .08 / each|
|Dye||$ .04 / each|
|Lids||$ .20 / each|
|Labels||$ .60 / each|
|Shipping||$ .77 / each|
|Total Variable Costs||$ 3.47 / each|
Estimated Fixed Costs For Candle Making
These are the fixed cost estimates for a batch of 60 8 oz mason jar candles.
|Fixed Cost||Cost Per Unit|
|Labor||$ 1.00 / each|
|Insurance||$ .05 / each|
|Listing Fees||$ .20 / each|
|Total Fixed Costs||$ 1.25 / each|
Total Cost For 60 Candles
Total Variable Costs ($3.47) + Total Fixed Costs ($1.25) = 4.72 Per Candle
$4.72 x 60 = $283.20
Total Cost Of Goods Sold = $283.20
Estimating Profit On 60 Candles
These numbers are the total revenue and total profit.
Total Cost Of Goods Sold – $ 4.72
COGS + 200% Markup – $ 14.16
Total Revenue For Batch of 60 Candles at COGS + 200% Markup – $849.60
Total Profit For Batch of 60 Candles at 200% Markup- $ 566.40
We left two potential expenses out of the numbers. Marketing and overhead. We left these out because they are going to be so high, they will skew the numbers on such a small batch of candles.
If you spend $800 per month on marketing, for a batch of 60 candles it will be outrageous.
However, if you make 60 candles 20 times per month that is 1200 candles.
$800 marketing on 1200 candles is $ .67 per candle.
I did not include marketing because it is likely you will work from home starting out and overhead will be minimal. However, if you are working from home a portion of your utilities may become a tax deduction at the end of the year. Discuss this with your accountant.
For the sake of an example, lets say you rent an air conditioned storage unit at a local storage facility. This is where you will do all of your packing and shipping.
Storage Unit Cost – $300 per month
$300 overhead on 1200 candles is $.25 per candle.
Total Cost + Marketing + Overhead = $5.64
Total Cost + 50% Profit Margin = $8.46
Total Cost + 25% Profit Margin = $ 7.05
As of the writing of this article, I see 8 oz mason jar candles going for between $ 8.00 each and $ 16.00 each.
How much margin you want to charge is up to you, but based on current prices you can go close to 100% margin.
How To Lower Your Candle Making Costs
Like many businesses economies of scale is the secret to increasing profits. How to lower your candle making costs?
Lower candle making costs by purchasing supplies in bulk and producing candles in bulk. Economies of scale state an increase in production results in a decrease in per-unit production cost. This is because the more supplies you order to make candles, the cheaper you get those supplies.
When you start buying material in bulk your expenses may drop to $ 3.47 per candle to $ 2.00 per candle.
The same theory applies to labor, yes it will take slightly longer to setup and pour 120 candles instead of 60 candles, but it will still be much faster than doing two batches of 60 candles from scratch.
If you get down to $ 2.00 per candle in variable costs, you could get down to $3.50 for COGS. Double the candles also cuts the price of marketing and overhead in half.
$ 3.50 (COGS) + $ .33 (Marketing) + $ .13 (Overhead) = $ 3.96
Economies of scale just made your candle cost $5.94 for consumers and you are making a 50% margin.
How To Ship Candles Affordably
This can come down to location and the weight and size of your candles, but for many people this will be the solution. How to ship candles affordably?
Ship your candles with USPS priority cubic shipping. On average USPS priority shipping gives you the greatest discount when shipping candles to the lower 48 continental United States. Sites like PirateShip can help you find the lowest shipping cost in every situation.
If you are shipping a candle that is at risk of melting or trying to build a luxury brand, you may want to opt for FedEx.
For more on shipping look at my article on shipping candles here.
How To Market Your Candle Business
You have several options for marketing your business. These options include, direct mail, cold calling, door knocking, print advertising, and social media advertising.
How To Market Your Candle Business
- Direct Mail
- Cold Calling
- Door Knocking
- Print Advertising
- Social Media Advertising
1. Direct Mail
You can actually go to the USPS and use their direct mail tool and it will let you target every business within your city, county and even on specific streets. They have partnerships with printing companies that can print up a post card or a letter with your proposal and you can select how many businesses you want to contact.
2. Cold Calling
Search on google for businesses near you or look them up in the phone book and ask them if they are interested in selling your product in their store.
3. Door Knocking
Visit local businesses and ask them if they would like to work out a deal to sell your candles on consignment or buy them wholesale. Bring them a candle that they can keep and take home, as well as leaving them a price sheet with your different price points.
4. Print Advertising
Put an add in your local news paper advertising your candles, leave your web address and offer free pickup and delivery for local orders. Put ads in the news papers of neighboring towns and offer them discounted delivery.
5. Social Media Advertising
I mention this one with some hesitation, social media advertising can burn through money quickly if you are not sure what you are doing.
You can set up campaigns on Facebook, make an ad, and list it. Depending on your settings, you might pay $ .25 or more every time someone clicks on your ad. This is not likely to convert in a profitable way with the price of candles. However, you can use local ads to create brand awareness.
Similar to Facebook ads, Pinterest also has its own ad platform. You can bid how low you want to pay for your ads to be clicked, and every time someone clicks it, you pay $ .08 or $ .10 and someone goes to your site.
Three Reasons Pinterest Is Better Than Facebook For Selling Candles
- If your candles are beautiful people will repin them, creating free advertising.
- Pinterest is much cheaper than Facebook to advertise on.
- Pinterest is a little more fitting for candles than Facebook.
Legal Requirements Of Selling Candles
If you are making a real business selling candles, we need to talk legally. You should form an LLC, you should get general liability insurance and if you have an employee you need to withhold taxes and have workers comp and unemployment insurance.
Let’s take a look at what this means.
You should legally structure your business as an LLC. If anything were to happen with the business and a lawsuit was brought against you, this would protect your personal assets.
These things often times can not be foreseen, that is why it is usually better to be safe than sorry.
You should purchase general liability insurance. If you are in the process of making candles and something happens and fire damages your workspace, insurance may help cover this.
If a customer is browsing your candles and one breaks and severely cuts the customer then you may be liable for their medical expenses. Liability insurance can help cover this.
If you hire an employee you will have to do tax withholding and payroll. You can signup really cheap with a company like Quicken Payroll and they will help you manage all of that.
Workers Compensation Insurance
If your employee is working and gets hot wax dumped all over them and has to go to the hospital, worker’s compensation is going to pay that bill. It will also pay them for whatever work they miss.
In addition, you are legally required to have worker’s compensation insurance. However, if you are the only employee the company has, and you are the owner, you can be exempt in some circumstances.
Unemployment Compensation Insurance
Whether you are the only employee your company has, or you have an additional employee it is important to carry unemployment compensation insurance.
If you keep up with your premiums they are super cheap in comparison to other expenses we have discussed here.
Even as the owner of the business, if you have to close the business through no fault of your own you can qualify for unemployment compensation.
However, this may vary from state to state.
Candle Making Profit Calculator
As you can see the business of selling candles has a lot that goes along with it.
Start by ordering smaller batches of supplies, even though larger batches come with a discount. You have to see how you like making candles before you really commit to it, and you need to develop a product worth selling first.
Many people sell candles for years without ever having any of the insurance and legal protections mentioned in this post, but I would not recommend it. Protect yourself and your family from potential lawsuits.
You should also consult with a lawyer and an accountant when starting a business. You can find one locally or do this online.