How to Start a $500K/Year Candle Business

by Brandon Boushy
How to Start a $500K/Year Candle Business

Did you know that you can start a candle business for less than $100 and grow it into $500K in annual revenue?

Jocelyn and Jen started RXLA as a side hustle making gifts for coworkers, then started going to farmers markets, and eventually opened a candle store and expanded their offerings on their way to bringing in a half-million dollars per year.

We’ll share strategies for how to start a candle business with just a little money, smart marketing, and responsible scaling.

Click on any of the links below to jump to the section that interests you, or just continue reading.

Candle Business Case Study: RX Candles Los Angeles

Jocelyn started RX Candles in 2013 as a hobby. When the business venture received crowdfunding, she invited Jen to help create soy candles. The candle brand opened a local craft store, but the pandemic caused it to shut down.

They are still recovering from the hit they took from closing the retail store, but increasing their offerings and selling wholesale has helped them reach $500K in annual revenue with 50% gross margins.

Customers loved their homemade candles so much that they asked for other products, services, and ways of buying. As the sisters gained confidence in their products, they realized they needed to listen to their customers and provide the services they—and other potential customers—wanted.

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Keep reading to learn more about the candle industry.

Candle Industry Summary

According to Grandview Research, the candle industry was worth approximately $13.6B in 2023 and is expected to reach $20B by 2030.

How much does it cost to start a candle business?

RX Candle Co owner holding a lit candle in the foreground and a screenshot of a crowdspring article on how much it costs to start a candle business hovering in the background

The candle industry has a low barrier to entry. According to Crowdspring, you should expect to spend between $9.5K to $78K to start a candle business, with an average of around $44K. But we’ve interviewed two business owners who say they started candle businesses for $100

A candle maker’s startup costs will vary depending on the cost of living in their location, supply and materials costs, and other factors.

Is candle making a profitable business?

A candle making business can be highly profitable, with gross margins of 50%. Ingredients, packaging, and marketing are some of the primary costs that will impact your profitability.

Can you make money selling candles from home?

Yes, you can start a candle business from home and make decent money, but it may be more cost-effective to utilize a fulfillment center to fulfill your orders. There may be restrictions in your town or homeowners’ association that impact the ability to run a home-based candle business.

Who are the major candle makers?

It’s helpful to research the major players in the candle market because you can identify gaps in the industry and ways to market your own products. The major candle makers include:

  • Yankee Candle (Newell Brands)
  • Luminex Home Décor & Fragrance
  • Bolsius
  • MVP Group International, Inc
  • Gies
  • Talent
  • Universal Candle
  • Qingdao Kingking Applied Chemistry Co., LTD
  • Vollmar
  • Empire Candle Co., LLC
  • Hyfusin Group Holdings Limited
  • Diptyque
  • Dandong Everlight Candle Industry Co., Ltd.
  • Fushun Pingtian Wax Products Co., Ltd.

While the major players in the industry get most of the revenue, there is always room for new entrants to make a great living selling candles.

How to Start a Candle Business

Candlemaker holding a tablet in her workshop

It helps to have a path of action before you start a candle business. Follow the steps below to start a successful candle making business:

  1. Learn how to make candles.
  2. Define your brand.
  3. Plan your business.
  4. Secure funding.
  5. Get business insurance
  6. Gather supplies.
  7. Create an online store.
  8. Market your business.
  9. Fulfill orders.

Step 1: Learn How to Make Candles

Before you can start selling candles, you need to know how to make them. Jazmin, another successful candlemaker, explained how to accomplish it in our interview. Watch the interview below:

Let’s look at what you’ll need to get started.

Tools and Materials for Candle Making

Good tools and candle making supplies can make the job more fun and more efficient. At a minimum, you’ll need:

  • 10 pounds of wax
  • Pouring pitcher
  • Pot to put the pitcher in to create a double boiler
  • Thermometer
  • Containers to hold the candles
  • Scented fragrances
  • Wicks

Jen told us:

Candle brands will want to scale responsibly, which means as the business grows, you’ll want to invest in better tools for efficiency.

How to Make Candles to Sell

You can start by buying a candle making kit, but as you learn, you’ll want to pick your own wax and essential oils. The candle making process normally follows the steps listed below:

  1. Fill a larger pot with water and the pouring pitcher with wax flakes.
  2. Hang the pouring pitcher on the inside of the larger pot to effectively create a double boiler.
  3. Wait for the wax to melt, which will take 45 minutes to an hour depending on the temperature.
  4. Pour the wax into candle molds.
  5. Add scents and wicks.
  6. Let them dry.
  7. Package the candles.

Jazmin told us:

When you make candles, only about 20% of the scent will actually be smelled, so you need to be aware of that [when adding scents], otherwise you won’t be able to smell it.

Step 2: Define Your Candle Making Brand

You’ll want to create a coherent brand for your candle making business. Some of the things you’ll need to consider include:

  • Target market: Who will buy your candles? Will you be mass-producing candles or creating a luxury brand image? Identifying your target market makes marketing and branding efforts easier.
  • Brand identity: What makes your candles unique? What sets them apart from other products on the market? Your brand identity will include your business name, logo, colors, and physical and digital design. Learn more about candle business names here.
  • Brand story: What inspired your candle business and the branding for it? A good story helps you connect with customers and create a more meaningful experience.
  • Brand values: What does your candle company hold dear? Think about how you operate your brand and what you want it to tell people. Your values should guide everything you do, including your materials, packaging, and shipping methods.

Creating a brand won’t happen overnight, but after continually telling your story and showing your values.

Step 3: Create a Candle Business Plan

RX LA candle company owner showing stacks of hand poured candles on a desk with a laptop that has UpFlip’s How to write a business plan article on the screen

Every business should have a workable plan to help guide decisions. When writing a candle making business plan, you’ll want to include the following:

  • Niche: Explain what makes your small candle business different and describe the target audience that your products appeal to.
  • Validate your business idea: Explain the research you have performed to establish your candle business will appeal to your target audience. Learn how to validate an idea.
  • Business structure: New businesses normally choose a limited liability company or sole proprietorship as their business structure.
  • Budget: Estimate your costs to start a candle business and operate it for one to three years. The budget will help you understand how much funding you’ll need until the business can support itself and your lifestyle.
  • Business bank account: Open a business bank account to help separate your personal and business expenses. You can also get an Employer Identification Number (EIN) to open a business bank account and access materials at wholesale prices.
  • Marketing plan: A marketing plan spells out how your candle business will approach products, pricing, placement (where you sell the goods), and promotion of your candles.

The biggest thing to remember about writing a business plan is it should be easy to understand, well-documented, and as short as possible.

Download our free business plan template and work through it while watching the video below.

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Step 4: Secure Funding for Your Candle Line

Jen suggests self-funding when you start a candle brand. Other small business funding options include crowdfunding, a standard business loan, a Small Business Administration loan, or an interest-free loan from friends and family.

Learn how to get business loans here.

Step 5: Get Business Insurance

You’ll want to get insurance when you create candles. Candles can start fires, and small business owners risk lawsuits from customers or employees. We suggest starting your business insurance search with Simply Business because it compares rates from the leading insurance companies.

Learn more about small business insurance here.

Step 6: Gather Supplies

New business owners will need to get the candle wax, different fragrance oil blends, packaging, and any equipment they don’t already have.

Depending on your startup capital and business needs, you may be able to buy most of the products on Amazon, or you may need to reach out to manufacturers.

Step 7: Create an Online Store

Business owner designing their candle company website on a laptop

You’ll want your own website for candle sales. That means you’ll need a domain name and a website builder. Then you’ll need to create a home page and product pages for each type of candle you sell. You might want categories like:

  • Scented candles
  • Luxury candles
  • Decorative candles
  • Fragrance oils
  • Tea light candles
  • Container candles
  • Birthday candles
  • Liquid candles
  • Insect repellant candles
  • Flameless candles
  • Pillar candles
  • Aromatherapy candles

Read more about the different types of candles on Styles at Life.

Step 8: Market Your Business

You’ll want to market your candles to your target market. Each small candle business will have a different marketing strategy depending on their target market, but most candle companies will include a combination of:

  • Social media marketing
  • Email marketing
  • Content marketing
  • Traditional marketing channels

Jen explained that their marketing strategy consists of local farmers markets, pop-up shops, social media, and email marketing. She also explained:

I feel like our biggest mistakes were not going digital fast enough. If we had a website and collected emails from the beginning we would have grown much faster.

Step 9: Sell Candles

Fulfilling orders is another crucial part of running a candle line. When you’re selling online, this will mean packaging and shipping the candles to consumers or other small business owners.

When you sell at local markets or a local craft store, you’ll still need packaging, but it could be a decorative box and branded bags as opposed to a box that is ideal for shipping.

Things to Consider When Starting a Candle Business

When considering how to start a candle business, you’ll need to consider:

  • Where am I going to sell my candles?
  • Am I going to hire employees or do it all myself?
  • What technology do I need when starting candle business operations?
  • What will my pricing strategy be?

Let’s look at each of these.

Find a Location for Your Candle Business

RX LA owner holding a smartphone with a map app loaded to show a business location search

There are a variety of places you can sell your candles. If you are wondering how to start a candle making business at home, you can do so using this guide and sell them on your website. Other options include:

  • Retail stores
  • Gift shops
  • eCommerce platforms
  • Flea markets
  • Your local farmers market

A candle business makes different amounts of money depending on the locations they sell their products and the cost of doing business for each type of store.

Hire Employees for Your Candle Business

A dedicated candle maker may grow to the point of needing to hire employees. When you do, you’ll need to get an EIN if you haven’t already. This is how the IRS identifies employers.

You’ll also need to have payroll software and optional benefits. Many accounting software providers include payroll resources, but if you want to consider other options, check out our article where we compare the 15 best HR companies.

The Department of Labor requires employers to display poster notices for employees, either electronically or physically in the workplace. A comprehensive employer guide for how to display these posters is available on their website.

You’ll also need to follow the following requirements:

  • The Federal Unemployment Tax Act (FUTA) requires any business with employees to pay a payroll tax.
  • Employment Eligibility Verification (Form I-9) allows business owners to verify the identity and employment clearance of every person they hire.
  • Meeting Occupational Health and Safety Administration (OSHA) standards and enforcing workplace safety are necessary for any business.
  • Worker’s Compensation Insurance is required to protect your business and employees in case of injury.

Keep reading for information on the technology you’ll need.

Implement Technology to Run a Candle Making Business

When following this step-by-step candle business guide, you’ll need to implement some technology. Most of the technology that RXLA uses is for marketing purposes. They mentioned using Klaviyo for their candle brand email marketing.

Create a Pricing Strategy

Top-down shot of a candle company owner taking notes on pricing strategy with a notepad, a candle, cash, a price tag, and a calculator on a desk

One of the easiest ways to ensure you’ll make good money is to keep your candle startup costs low and charge market value for the products. You’ll want to target a gross margin of 50% for your candle business. To calculate the price easily:

  1. Add up the total costs for a batch of candles
  2. Multiply the cost by 2.
  3. Divide by the number of candles created.

That should put you right at 50% gross margins.

Your pricing strategy can be created in a few different ways. The primary ways of pricing candles are:

  1. Cost of doing business
    • Add up all your costs and divide them by the number of candles you make.
    • Add the amount you want to earn for each candle sold based on the time it takes you to make, sell, package, and ship each candle. So if you spend four hours making and shipping 200 candles and want to make $100 per hour, that’s $2 per candle you add to the costs.
  2. Competitors pricing
    • Look up comparable products and price your items based on them.
  3. Luxury candles
    • Create a brand story that makes your particular candle more valuable. This is the strategy that Jazmin used.

Whichever strategy you use, make sure you are realistic about how much time you are willing to dedicate to it. If you are only going to spend a few hours a day, you can’t make as much as if you treat it like a full-time job.

Ideas for a Candle Making Business

Candlemakers primarily target women, but according to the National Candle Association (NCA), both men and women consider candles appropriate gifts. They say the most common times people buy candles are:

  • During the holiday shopping season, which is when 35% of sales occur
  • Housewarming gifts
  • Gifts at dinner parties
  • With thank you notes
  • For adult birthdays

How to Start a Candle Business With No Money

RX LA candle company owner holding a lit candle and a stack of cash with a red X over it in her studio

To start a candle business with no personal finances, you’ll normally need to focus on selling candles using a “print”-on-demand or drop shipping strategy. Once you have built up some money from candle sales, you can start reinvesting in the supplies and equipment to start making your own homemade candles.

The good news is that it’s inexpensive to start selling candles. Both of the business owners we talked to have started with $100.

Open Your Own Candle Business

Making candles might not seem like a profitable business, but it has the potential to blossom into a high income. Jocelyn and Jen started crafting candles as gifts, sold them in farmers markets, opened and closed a brick-and-mortar store, and were late to the digital marketing game, but they still reached an impressive $500K in annual revenue.

Their story teaches us valuable lessons about resilience, adaptability, and the power of listening to customers. They found ways to overcome challenges and expand their offerings. You can use their candle business tips to succeed too.

The candle industry is ripe with opportunity. With global revenue projected to soar in the coming years, candle business owners can sell candles to make a great living. And the beauty of it all? Given Jocelyn and Jen started with $100, a candle business is one of the best businesses to start from home.

As you embark on your candle making journey, remember that success lies not just in the quality of your product but also in the strength of your brand, the efficacy of your business plan, and the dedication to continuous improvement.

Whether you dream of creating luxury candles or catering to a specific market segment, the possibilities are limited only by your imagination and determination.

So ignite that spark of creativity, pour your passion into every candle you craft, and watch as your business illuminates not just spaces but lives, one flickering flame at a time.

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Brandon Boushy

Our lead writer, Brandon Boushy, has been a business consultant, business owner, and marketer since 2017. Brandon is committed to the pursuit of knowledge and continuous improvement. He measures his success based on how many business owners he helps succeed. Brandon started Raising Daisy Photography in 2017 with Stephanie MacIver. His role was focused on marketing, estimating, and managing customer interactions. He is also a freelance business researcher and has provided over 3,800 hours of business research for more than 50 clients. His blogs are read by over 2 million people every year. Brandon told us: "My motto is never quit learning. I bring this motto to everything I do, and find writing the best way to help share the data I obtain to assist business professionals pursue their dreams." He empowers companies to improve their communication and brand awareness through creative content strategies and blog writing.

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Mark@ 2024-03-30 16:09:16

To Learn More About Financing Candle business or any other venture Business Resources

Zula@ 2024-03-23 16:13:14

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David@ 2023-02-11 07:49:58

Did anyone find out where she gets the packaging from?

Elnora Hernandez@ 2022-04-24 08:37:25

I’m just confused about where she buys the candle black boxes and then the actual mailing box.

Brandon Boushy@ 2022-04-27 15:48:02

I've reached out to her. Once she responds, I'll let you know where she gets them

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