Making candles can be a great hobby, but it can also be a great business. The great thing about the candle business is that you have so many different ways to sell your product. Ways of selling that are simply not available to other types of business. The question is how profitable can making candles actually be? How much money can you make selling candles?
Candle makers make money at an average of $50,000 per year. With the bottom 10% making less than $25,000 and the top 10% making more than $100,000. This number depends on how many candles you are selling and at what price point you are selling them.
These numbers are highly dependent on the types of candles you are making, the number of candles you are making, and what your marketing strategy is. However, making candle scan be profitable.
How To Calculate Candle Making Income
Calculate candle making income by multiplying the number of candles you want to sell per day by the profit you make on each candle. For example, 10 candles multiplied by $10 profit per candle would equal $100 dollars profit per day. Selling more expensive candles or selling more candles would increase your income.
Pick the amount of money you want to maker per year selling candles.
For example, I am going to say $40,000.
$40,000 divided by 365 days is approximately $110 per day.
That means you need to sell 11 candles per day at $10 profit each.
If you want to make more money you need to increase the price of your candles or sell more of them. If you are okay making less money then you simply need to sell fewer candles.
I have a free Microsoft Excel spreadsheet you can download to help you with your candle pricing. You can download that below.
Candle Business Startup Costs
When getting in to the candle business you are going to have some startup costs. You are going to need to buy some equipment and you are going to need to buy some candle making supplies.
You can buy all of the equipment straight away but do not buy all of the supplies. You will need to order a few small quantities of supplies so that you can formulate your candles first.
Equipment Required To Make Candles
Total Cost: $162.82
This equipment is really the minimum you will need if you are serious about making candles. This is essentially what I purchased when I started out. However, I found an old pot from my kitchen to use for the double boiler. You will also need wick bars but you can probably get clothes pins from the dollar tree depending on your candle type.
I would consider buying an additional melting pot once you are established so you can get multiple batches of wax going quickly for pouring many candles at once.
With a 4lb melting pot, you can probably pour around 9 – 8 oz candles at once depending on how much fragrance oil you are using.
Supplies Needed To Make Candles
This is where I will caution you on how much you spend starting out. You need to test fragrance oils and waxes and wicks before ordering them in bulk. You can probably get away with spending $100 to run 4-5 test batches.
Once you got your formulas and favorite ingredients ready you will be ready to order wholesale. Ordering wholesale supplies are where you will increase your profit margins. It can save you dollars per candle.
- 45lbs Wax
- 45 oz Fragrance Oil
- 100 Wicks
- 100 Wick Stickers
- 100 Containers
- 45 Dye Blocks
Total Cost: $270 (Not including shipping if you order online)
Checkout CandleScience to price supplies.
Total Initial Investment
So after buying all of your equipment, test supplies, and wholesale supplies you are looking at a total initial investment of roughly $550.
You will have enough supplies on hand to make 100 – 8 oz candles which will only last you for 9 days if you have a goal of making $40,000 per year.
If you can pick up your supplies in person this isn’t a bad deal. Go pick up your supplies roughly once a week and keep them so you know what you need and when to get them.
However, if you are buying online and paying for shipping you might consider ordering a bigger initial batch of supplies and getting freight shipping. The shipping is more expensive but it will drive material costs down, even more, to help offset the price.
How To Price Your Candles
Price your candles by multiplying your cost of goods sold by two to four times. This will give you a profit margin of between 50% and 80%. This means a candle that costs $5 to make will bring in $10 to $20 total income each, with $5-$15 of that being profit.
According to the above example, you will be making roughly 100 candles with a material cost of $2.70 each.
You will need to buy boxes and packing material from Uline which will cost you about $1.00 per candle.
Now we are at a cost of $3.70 per candle.
If you want to earn $10 per candle then that brings your retail price to $13.70 for an 8 oz candle.
Currently on Etsy 8 oz candles are going for between $10.00 and $25.00 not including shipping so you are in the right price range.
These prices are all assuming you sell online, if you sell through a local store they will also need to earn a profit from each candle sold. Which will lower your profit margins but adds some financial security to your business if they are a regular wholesale customer.
How To Make More Money Per Candle
Make more money per candle by buying your candle making supplies wholesale. Larger orders come with larger discounts which will increase the amount of money you make per candle. In addition, using more premium fragrance oils and ornate candle containers will allow you to raise the price more.
If you want to increase your profit per candle sold you can use a little bit more elegant container, use packaging that is a little more attractive and market your product as a little bit more luxurious.
It will cost a few dollars more in material but instead of $10 profit per unit, you might be looking at $15-$20 per unit.
The drawback is you might be limiting the number of orders you can get.
Frequently Asked Questions
What is a good profit margin for candles?
A good profit margin for candles is anything at 50% and up. If you are selling basic candles or selling candles wholesale your margins can be as low as 25%. However, if you are selling premium candles you can have margins as high as 80%.
Is it cheaper to buy candles or make them?
It is cheaper to make candles than it is to buy them. You can make a 10-14 oz candle for between $4 and $6 dollars, and if you were to buy a similar candle at full retail price you might pay as much as $12 to $20. However, you need a few items such as a kitchen scale, and a thermometer to get started making candles.
Where should I sell my candles as a new candle maker?
Consider selling your candles on Etsy, Ebay and Facebook marketplace as a new seller. You have little to no overhead and you do not have to do much in the way of marketing. If you have a unique product with a fair price people will find you on these platforms. Once you gain a following you can build your own website.
How much should I sell my homemade candles for?
Homemade candles should be sold for at least double what it costs you to make them. If it costs you $5 to make each candle, you should sell the candle for at least $10. However, some people charge 3x and even 4x more than what it cost them to make the candles.
Conclusion
In conclusion, math is easy to do. It is the business plan and the marketing strategy that make the difference. It takes discipline to save profits for the business instead of passing them all on to yourself. Candle making can be profitable if you have the discipline and are armed with the knowledge to make the right choices.
However, if you ever want to scale up your business or potentially hire employees you will need to leave some profits in the business. If you are content being a one-person, work-from-home show then it is fine to take all the profits. As a sole proprietorship, you will be taxed the same on them anyway.
