STARTING A CANDLE MAKING BUSINESS
Are you ready to take your candle making hobby to the next level and make it a candle making business? Or perhaps you have never even attempted to make a candle, but are looking at different options to start a business.
The idea of having your own business is certainly an exciting one. The amount of information on how to make candles, start a candle making business, start a home-based business, etc. is overwhelming, contradictory, and can be difficult to know which way to go.
However, there is also a lot of great info out there, and we thought we would throw in our two cents! Members of our team have started and grown some of the country’s largest candle brands from the ground up. We also work with candle makers ranging from small home-based businesses to some of the world’s largest factories on a daily basis. So basically what we are saying here is that we have been around the block a time or two when it comes to starting up and running a successful home fragrance or specifically, candle making business.
So, where to start with a candle making business?
Before you even think about selling your candles, you need to be sure you’re making a consistent product that burns properly and is safe (see our How to Conduct a Burn Test).
We recommend starting off by reading the blogs below to give you a good understanding of how to make a properly functioning candle:
- How to Make a Wooden Wick Candle
- What Size Wood Wick Should I Use
- Choosing the Best Candle Wax
- Candle Making Terminology
- Candle Fragrance Basics
- Candle Safety
- How to Conduct a Burn Test
- What is an Ideal Flame Height?
This will give you enough information to start making candles, and if you already are, we still suggest checking out the blogs above as there is valuable information that you might not already know. Then be sure to go to LAB & CO for your candle making supplies so you know you are getting top quality ingredients!
Once you are confident that your candles are performing as they should, that they are safe, and that you can consistently reproduce them, it’s time to ask yourself, “Who would want to buy my candles?” Yep, you need to define who your customer is and know exactly who you are targeting.
Other important questions when starting a candle making business
- Are your candles different from others?
- What price category do your candles fall into and can you make a profit?
- What will your mode of distribution be?
- How will you create a brand name and logo?
- What is your budget and what legal processes are necessary?
Who would want to buy my candles?
Do you know who your customer is? What is their style, design aesthetic, and how much are they willing to spend on a candle? Where do they shop? What are their values i.e. are they green and into sustainability? Are they into luxury?
Maybe you even have a very specific person in mind. If so, investigate what they pin on Pinterest, what they post and who they follow on Instagram. Does your product fit? I’m going to go out on a limb here and assume your first customers will be a lot like you.
If making candles started as a hobby, you were most likely making them for yourself and chances are, your first customers are going to be people from within your own circle of friends, family and coworkers. The point here is to know exactly who you are targeting with your product. You can’t be everything to everyone, nor do you want to be. Do what you do and be the best at it. Find your niche and RULE it!
Below are a few excellent examples of candle companies who have definitely found their own unique place in the candle world and are crushing it!
- Luxury Candles: Element Candles
- All Natural Candles: Remedium Candles
- Handcrafted Candles: Zoa Concept
- Low Price, High Value Candles: DW Home
For even more details on defining who your target customer is, check out our blog Who Would Want to Buy My Candles?
What makes your candles different from others?
OK, let’s face it, this is a tough one. There are so many candle brands large and small, creative crafters, Etsy sellers, and honestly just so many talented people out there! It seems like just about every idea has been thought of…. or has it? Maybe you have an idea that has never been done before in the history of candle making (that would be about 5,000 years by the way).
Or maybe you just make a really beautiful candle that burns properly, smells great, is packaged cleverly, and made with love and your own two hands. Quality and consistency are a great starting point, as there are a lot of candles out there that don’t even meet those basic criteria!
The important point here is to have a story to tell your customer. Do you use all sustainable ingredients and practices? Is your wax blended by monks in an ancient monastery on a hillside outside of Prague? Did you start your candle line because the smell of violets reminded you of your grandmother who loved them? HAVE A STORY, make sure it’s true, and something you are passionate about and believe in.
Visit our blog What Makes Your Candles Different? for more details on how you can stand out!
What price category do your candles fall into? (And can you make a profit?)
Obviously, pricing has a lot to do with who your customer is. If you are going to be asking for top dollar selling to the luxury market, then you had best be using top quality everything. Make sure to stop by LAB & CO for exclusive fragrances, natural wax blends, luxury packaging, unique vessels, and all your candle making supply essentials.
Maybe your customer is eco-friendly, so you are being minimal on packaging and using more natural and sustainable ingredients. Keep in mind these can all be costly as well, so price accordingly. Many wax blends such as soy, coconut, and beeswax can be found from renewable and ethically sourced origins. Our LAB & CO wax blends utilize renewable soy and coconut waxes if that is what you are in the market for.
Or perhaps your customer is looking for a lower cost candle and you need to be mindful of the price of your components. Either way, be sure to identify who your target customer is first. The point is to make sure your target customer will actually pay the price you will need to charge. Just because a candle isn’t in a gold encrusted box and sprinkled with diamond dust, doesn’t mean it’s inexpensive to make!
To simplify the process we prefer to work backwards. Below is an example of how to do that:
- How much do I think my customer will pay? A good time to determine this is during the “Who Would Want to Buy My Candles” phase. Based on what other types of brands your target customer is following on Instagram or pinning on Pinterest, you should be able to get a fairly good idea of what their spending habits look like. For this example, let’s say the appropriate retail price is $45.
- If you plan to wholesale your candles in retail stores or on e-commerce platforms like Houzz or AhaLife, your wholesale price would typically be half of your retail price to account for the reseller’s margin. So in this example, your wholesale price would need to be $22.50.
- COGS (Cost of Goods Sold): This is the direct cost of the materials and the labor to make the candle. This does not include indirect expenses like rent, electric bill, insurance, etc. This is only the cost of the materials and the labor. Our experience has shown that you want the COGS to be one-third of the wholesale price, so in this case that would be $7.50.
Keep in mind this is just the goal. Maybe the candle actually costs you $12.00 to make in the beginning, but you know in time as you are buying in higher quantities and your costs are coming down, that your margin will increase and get you down to $7.50.
Assuming you are hand-pouring all your candles, your labor cost should decrease as well as the volume being produced increases. The more candles you create, the more efficient you will become in your process.
More details are available on our blog How Do I Price My Candles?
What will your mode of distribution be?
This is a really fun one with so many options! Will you sell at your local farmer’s market? Craft shows? You could create your own website on Shopify, Squarespace, Wix, or one of the many others. Perhaps you would like to set up an Etsy or Amazon shop, or host home parties. Maybe they all sound great to you! Setting up any of these platforms can take quite a bit time and dedication (and it always takes longer than anticipated!), so we suggest tackling just one at a time (or two if you’re feeling ambitious). Keep in mind each option will have specific fees associated with it. Farmer’s markets and crafts shows typically have a one time fee, which can vary based on the size of the market and your geographical location. Website platforms usually charge a flat rate per month. Etsy is a great low cost option, charging only $0.20 per listing monthly. Amazon bills a monthly flat rate plus fees on each sale you make (for candles, the fee is 15% of your sale price).
Whatever you choose to do, just know you need to PROMOTE the heck out it. Instagram, Facebook, Pinterest, throw the whole kitchen sink in! Make sure you have excellent photos of your product and that means really excellent photos. With so much fantastically, amazingly, great content out there, you can’t afford to have your photos be anything less than superb! Honestly, this whole excellent photo thing cannot be stressed enough.
If you are going to try to wholesale to stores you must have a line sheet (list of your products, their SKU’s, wholesale prices, and descriptions), know how to approach buyers, and have a basic understanding of retail. Thinking of tying a big pretty bow on top of that box? That doesn’t stack well on a retail shelf! Do all of your boxes look the same at first glance even though there are 8 different fragrances? That’s a nightmare in a retail environment. How about that pretty wax seal? Disaster when customers open up boxes to smell what’s inside. Stores are also going to want testers and they are going to want them for 50% off of the wholesale price. On the example from how to price your candles located in the paragraph above, that would be $11.25 (go figure, you still made a little bit of money on those!).
How about your brand name and logo?
When it comes to your brand name we can tell you with confidence: the simpler, the better.
The Thesaurus is an invaluable tool when it comes to finding a name. For example, go to the online thesaurus and type in “scent”… Up comes Aura, Whiff and Essence among many others. Type in “flame” and you’ll find names like Blaze, Glow, Illumine, and Shine. Basically, several nice names for a candle line, depending on the direction of the collection. It’s perfectly normal for this to take many hours (more like weeks) to find just the right name for your brand. Be patient and let the creativity flow!
An important factor to consider is the availability of a URL and Instagram handle to match your name. Lean Domain Search is a great tool to check for availability and also to help generate original business names. Search on instagram in the “Discover” section for the names of handles you may want to use, and if nothing comes up, the name is available!
As far as a logo, if you don’t know a graphic designer, there are some great online services that are reasonably priced. Just Google “need a logo” and you’ll see several.
Budget and Legal Processes
Where to even start? We’re guessing if you are starting a candle business, you are most likely an artsy creative type…but being creative doesn’t mean that you aren’t or can’t be business-minded. Actually, we are quite sure that some of you are the perfect balance of both creative genius and business geek. We’re also willing to bet our paycheck that many of you aren’t! Trust us, we’ve seen it again and again, a super-smart creative entrepreneur who puts their heart and soul, along with all of their time and energy, into creating stunning product, but neglects the business-y stuff, and in the end it all falls flat on it’s beautiful face.
So how do you make sure you are taking care of the business stuff?
- Have a business plan. We know, some of you just gagged. While it is possible to build a business without one, we highly suggest at least creating a basic plan. It doesn’t have to be lengthy or scary, it can be simple. For a small home based start up, maybe it’s as simple as a list of goals with target dates and a short paragraph of how you plan to achieve each goal.
- Legal stuff. It’s SUPER important to know what you need as far as a business license, resale license, trademarks, patents and the like. Be sure to cover your butt!! Will you be a Sole Proprietorship, Corporation, Partnership or LLC? It is worth spending a little money on an accountant and attorney to make sure you start off on the right foot.
- Marketing Plan. OK, so this can be simple but it needs to be well-planned, cohesive and tell a story. You can’t be everything to everyone (we’ve said this before), so be who and what you are and be the best at it. Keep your social media (Instagram, Pinterest, Facebook, etc) specific.
- Have a budget. I know, I know, I know, this part really isn’t fun! Check out Budgeta or The Balance Small Business Budget for help. It might not be a bad idea to get Quickbooks to keep your finances organized and it sure makes it easy when tax time comes and all you have to do is print out reports and hand them over to the accountant rather than scrounge through shoe boxes of receipts and try to put together spreadsheets on Excel.
Check out all our nitty gritty business tips on our blog Budget and Small Business Stuff.
Keep in mind with all of this, that it is a changing and evolving process. Your candle business has a life and it’s important to review and reevaluate, adjust when necessary and plan. But for God’s sake, have fun!
To wrap this up, the thing we hear the most is “Can I do this?” The answer is, if you believe you can, you can. Set realistic goals and timelines, become a master at your craft…making sure you make quality product and love what you do!
READ OUR CANDLE BUSINESS SCHOOL SERIES:
- Help, I Need a Logo!
- Choosing a Brand Name
- What is the Best Mode of Distribution for my Candles?
- How Should I Price My Candles?
- Budget and Small Business Stuff
- How To Sell Scented Product Online