How to Start a Candle Business
Whether you’re a DIY candle maker or an entrepreneur on the hunt for the next hot business venture, starting a candle business could be for you.
This blog is a free guide on how to turn your pastime into a lucrative business, covering things like costs, profit margin, and ideas on where to sell online.
Research and plan your business
You’ll need a step-by-step plan of exactly how you’ll run your business to get a realistic overview of whether or not it’ll work. It can be hard to iron out the specifics of a business if you’re not entirely sure how the industry works and what the regulations are. Some things you’ll have to think about include:
- Logistics and acquiring materials to produce your candles
- The full costs of bringing your candles to market
- Pricing strategy
- Target audience
- Branding
- Candle trends
- Marketing strategy
If you already make homemade candles, you’ll have some of these things figured out already. However, things can change slightly as you begin making candles for a profit, rather than just for fun.
Candle business trends: enlightening statistics
If you’re wondering how profitable a candle business can be, here are some interesting statistics:
- The global scented candle market has seen an upturn of 27% in 2020 and 2021 [1].
- Candles are used in 7 out of 10 U.S. households [2]
- After the US, the second-biggest market for candles is in the UK, and then Australia [3].
- By 2027, the market is estimated to reach a global value of US $6.64 billion [4].
- Approximately 35% of yearly candle sales occur during Christmas/Holiday sales [5].
Equipment and costs of candle making
You don’t need a lot of equipment or space to start your own candle-making business. If you’re making and shipping your products yourself, you’ll be able to run your business from home if you have the space.
You can buy complete candle-making kits online, or buy items separately if you prefer. Altogether, this equipment costs about US $20 in total. The main tools you need for candle making are:
- A pan and bowl to melt the wax, or a specialist double-boiler for larger production.
- A thermometer.
- Measuring equipment, like a scale and measuring jug.
candlescience has produced a guide on how much it costs on average to produce one candle [6]. This is for a large batch of 135 5.8oz candles. (NOTE: prices stated are in USD)
- Soy wax: 41c
- Wicks - zinc, cotton or wooden: 8c
- Jars or tins with lids: 68c
- Fragrance oils: 46c
- Postage and packaging supplies: 82c
- Display labels and warning labels with adhesive: 54c
- Total: $2.99
These costs are variable, and will depend on the type of candes you sell and where you buy your products from. There are other costs to consider: if, for example, you want to add colouring agents or other decorative elements to your candles.
There are also fixed costs, like labour, insurance, and listing fees if you choose to sell your candles on an online marketplace.
Pricing and profit
It’s a competitive market, so you must think about exactly how you’ll want to price your candles.
First, think about the candles you make and the customers you’d like to sell them to.
Are your candles designed for businesses like spas, beauticians or clinics where people come to relax? You might want to think about market pricing, since you’ll be selling business to business.
Are the waxes and wicks you use environmentally sustainable, designed for those willing to pay more organic and vegan products? You could consider prestige pricing.
Or, are you interested in mass-producing your candles, selling them in supermarkets, competing with high-street candle makers. In that case, cost-focus pricing and every-man business personality could be your go-to.
Prices for candles vary anywhere between $5 for mass-market, and between $30 and $80+ for luxury jar or pillar candles [7]. The average profit margin to aim for on a new candle business is between 25 and 50% according to candlescience.
Deciding where to sell your candles
Deciding where to sell your candles will depend on the type of candles you make. Some options include selling your candles from home or opening your own pop-up market or retail store with the help of a small business loan.
You could also sell your products at farmers’ markets, or opt to sell them for wholesale prices to supermarkets and gift shops.
The most viable option for new businesses is to sell online. You could choose an online marketplace like Etsy, eBay or Amazon. If you’d prefer to list your items for free, you could turn to social media platforms like Facebook and Instagram. Here, you can link to your very own e-commerce website.
Here, you have ultimate editorial control over how you represent your items, your branding, and how you choose to process customer payment.
Turn up the heat
When starting your own business, organisation and precise money management are key. Point of sale (POS) systems work as the backbone of both online and in-person retail businesses. Designed to work as a complete business management system, you can control all vital aspects of your company from one cloud-based system.
- Receive detailed analysis on the areas that matter to your business:
- Sales reports filtered by product, time, or seasonal trend
- Inventory reviews including profit margin, profitability, trend detection
- Multi-award-winning inventory management that syncs online sales and in-person sales for the most up-to-date stock levels.
- Automated orders that purchases stock once it falls below a certain level.
- Customer management systems that save customer contact details and shopping preferences for more targeted marketing.
- Integrations with over 100 apps including marketing, accounting, bookkeeping, and loyalty program apps.
If you’d like to learn more about our industry-leading software, request a free callback with one of our experts.