Can an at-home candle business be profitable? Yes. Candle making is one of the few industries with an almost limitless earning potential if you scale the business correctly. If you have an excellent product, consumers will snatch it up. Candles are one of the few things used widely by people in all demographics.
You can make a profit by making homemade candles.
Here are some tips on how you can make money with candles:
- Include Experimentation with your startup costs
- Pick an Hourly Rate for Yourself
- Luxury Brands Take Work
- Create a Functioning Workspace
- Get Creative with Equipment
- Order Supplies in Bulk
- Price Your Customer Acquisitions
- Pick Appropriate Shipping Costs
- Don’t Waste Money on Research and Development
Startup Costs Will Include Experimentation
It’s easy to remember the basics when it comes to startup costs; overhead, equipment, wax, scents, wicks, and the kits that help pull them together. But before you can commit to an exact candle recipe. You must go through a period of trial and error until the product is perfected.
The supplies you buy during this time to experiment with different ingredients should be factored into your startup costs. There’s no bigger upset than having perfected your candle, only to realize you don’t have the capital to launch the business needed to sell them. Make sure your experimentation is something you can afford by allocating funding at the beginning for it.
You will need to spend a little money on items like essential oils, wicks, and wax before you are able to create your final masterpiece. Make small test batches and try not to spend more than $100 out of your pocket on experimentation.
Pick an Hourly Rate for Yourself
As you’re building your business plan and concept, think about the hourly rate you’d like to make. You’ll need to add that cost to the cost of materials as you pick a final price for your wax creations.
Don’t undersell yourself. If you want to create a lower-end candle because they sell well, make sure you’re prepared for the increase in production time that comes with bulky orders. Remember that an at-home business can only handle so many sales, so make sure those sales reflect the labor you’re putting in by not selling the candles too cheap.
Make sure you match the speed of creative execution to the hourly wage you want out of your business, so you don’t short-change yourself. It’s easy to resent a business that was supposed to be fun if you’re working long hours for little payout.
Also, keep in mind that profits above a livable wage should be reinvested back into the business. It’s easy to think that any real gains will go straight into your pocket, but this is a bad move and will stagnate your business. Spend profits above your set wage to reinvigorate the business with something like new product lines, better candle-making equipment, or flash sales on old inventory.
Luxury Brands Take Work
Even if you eventually want to sell your candles for $200, you should aim for a midrange price point at the beginning. It’s time to upscale into a luxury brand only when you can reinvest profits into the business. Keep it simple during startup when things are coming out of your own pocket.
An example of this is how you approach packaging. At first, you might choose a rustic look with a piece of fabric and twine. As your company becomes more lucrative, you can up your game to tissue paper and a box with a logo.
Create A Functioning Workspace
The better your production area and workspace, the smoother the candle-making process will go. Keeping your work area clean and organized will help you create more candles per day, which eventually puts more money in your pocket.
This circles back to the hourly wage that you’ll want to make sure you’re making. If you know where everything is, you’ll be able to produce more in a shorter amount of time. If you’re getting frustrated and find yourself sifting through a mess to find what you need, you’re wasting precious time that could be devoted to something more productive.
Get Creative with Equipment
If you’re not investing profits into equipment upgrades, it’s best to keep things to the bare minimum to avoid escalating startup costs. Make a double boiler out of an old kitchen pot. Things like wick bars, which keep the wick in place as the wax is poured, will need to be purchased.
Differentiating what you need from things that can be upcycled at home will save you lots of cash and get you on the road to profits. You should avoid all equipment you don’t need until you’re earning over your hourly rate and can reinvest to increase supply.
Order Supplies in Bulk
Once you know exactly what consumables you’ll need to create your homemade candles, you need to start ordering supplies in bulk. This will save you money on a per-item basis, which means there’s more room for profit at the final sale.
Ordering supplies in bulk once you’ve already established a market price is a good goal. Your original candle cost will take overhead into account as well as hourly rate, experimentation, and other factors, so any more money you can squeeze out of the process will go straight into your pocket.
Price Your Customer Acquisitions
How you advertise and where you sell your product will inform you how much it’ll cost your candle-making company to find a customer base. If you go to a Farmer’s Market, there will be a booth cost that counts toward customer acquisition. If you only sell online, social media ads and the time you spend self-promoting need to be taken into consideration. How much are you willing to pay for a customer?
Again, the answer varies. You should study the numbers specifically for the demographic you’re targeting and try to get your face out there through the best channels possible. For example, using TikTok to appeal to teens is ideal, whereas Millennials are primarily on Facebook.
Picking the correct online marketplace for digital storefronts will also affect how many customers you’ll attract. If your candle really accentuates its handmade nature, Etsy might be the place for you. There’s also eBay, Amazon, Facebook Marketplace, and Craigslist, to name a few.
Pick Appropriate Shipping Costs
Postage and bubble wrap can add up quickly and eat into your profits if you’re not careful. Make sure you plan out exactly how much you need to charge for shipping, so you’re not draining money out of your business unnecessarily.
A lot of online stores offer shipping deals to customers if they make a big purchase. This is a great way to get people to your storefront, however, you still need to make sure that you’re turning a profit on heavier boxes. You can also figure out a standard shipping method with a reliable price, and just factor that cost into the amount you’re charging.
Don’t Waste Money on Research and Development
What matters is that the candles you’ve created meet safety standards and are appealing. Once you’ve researched what you need to know to create safe and sellable candles, stop wasting your money on analytics. Any money spent on testing can’t be returned, so beginners on a tight budget should develop and scale their own businesses instead of risking bankruptcy. Google Trends is free, which is a great place to start.
One of the easiest things to do is buy out someone else’s small candle business that already has a built-in following and proven business plan. Successful eBay and Etsy stores can be purchased from entrepreneurs looking to move on, and then you have something established from which to launch yourself.
Candle making is one of the few businesses with a small start-up cost and a huge room for profits, and luckily it just takes common sense and marketing. There are things to keep in mind when opening a candle business, especially if you’re driven by profits.
Homemade candles are profitable if a correct business structure is built around them, and if you follow these tips, you should be making money with your candles in no time. Homemade candles are not only fun to make, but they’re a potential source of income for you and your family.
Can I Write Off Candle Business Costs on My Taxes?
Yes. Things like design software, insurance, electricity, and rent can be written off on your taxes. Remember you’ll have to pay a tax on your sales, but if your at-home candle business is written off properly, the amount you owe will be minimal.
Will My Candle Business Need to Worry About Sales Tax?
Yes. Appropriate sales tax for each customer will need to be considered in the final price of your item. Some online storefronts will do this for you.
Is Making Homemade Candles Cheaper than Buying Them?
It’s cheaper to make them. Candles generally cost about $3 to make, which is not a price attainable in most stores for a quality product. All you really need is a thermometer, a kitchen scale, and a good candle receptacle to make candles at home.
Looking to start your own candle making business, check out my startup documents here
Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.
Meet Shawn Chun: Entrepreneur and Candle Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online candle business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a candle business owner at a craft fair, farmers market, retail location or anywhere else I see myself. I know how hard the struggle is to obtain and retain clients, finding good employees all while trying to stay competitive. That’s why I created Candle Business Boss: I want to help candle business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.