How to Start a $200K/Year Candle Business

  • by Brandon Boushy
  • 2 weeks ago
  • 0
  • 18 min
Woman making candles

Ever wondered how hard it would be to start a candle business? We’ll show you how.

Jazmin Richards started her candle business, Blk Sunflower, with $110 after she lost her job and has made $300,000 in 18 months creating and selling her own candles, apparel, and accessories. This is the kind of creativity and motivation we love seeing!

We’re going to share her strategies with you so you can start a candle business and create a bright future too. We’ll give you all the info to start a candle business, create candles, and sell them on Shopify.

Step 1: Develop your candle making skills

Before you can start selling candles, you need to know how to make them. Jazmin explained what you’ll need and how to accomplish it in our interview. Let’s look at what you’ll need to get started.

Acquire tools and materials for candle making

Good tools and supplies can make the job more fun and more efficient. Jazmin let us know what you’ll need. She told us:

You’ll need:

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

Material costs for candle makers

Jazmin told us you’ll need about $100 to get started, and you can buy everything you need on Amazon. She likes to mix multiple scents to create unique scents.

How to make candles

Jazmin gave the following instructions to make candles:

  1. Fill a larger pot with water, and the pouring pitcher with wax flakes.
  2. Hang the pouring pitcher where it is on the inside of the larger pot to effectively create a double boiler.
  3. Wait for the wax to melt which will normally take 45 minutes to an hour depending on the temperature.
  4. Pour 9 ounces into each container
  5. Add scents and a wick.
  6. Let it dry

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 otherwise you won’t be able to smell it.

Watch the interview below:

After the candle has dried, you have to pack it so it’s ready to ship when a customer orders. Jazmin’s packaging looks like the picture below. Decorative packaging gives it a more prestigious look and commands a higher price.

 You can hire packaging designers on 99 Designs or through other similar sources. In fact, most print companies will be able to print the packaging for you, but make sure to specify what materials you will be printing on when requesting quotes.

Now that you know the candle making process, we’ll discuss ways to come up with candle business ideas and work to understand the type of candle business opportunities in the market.

Step 2: Ideas for a candle making business

Candle makers primarily target women as they love good-smelling spaces, 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 a thank you note
  • For adult birthdays

There are a variety of styles of candles, but the main types are

  • Tea light candles
  • Container candles
  • Birthday candles
  • Liquid candles
  • Insect repellant candles
  • Flameless candles

Read more about the different types of candles on Styles at Life. Keep reading to learn more about the major candle makers.

Who are the major candle makers?

It’s helpful to know who the major candle makers are because you can look for gaps in the industry by looking at their sites. The major candle makers include:

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

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.

What is the industry outlook?

According to Precision Reports, the global candle market was $5,859.1 million in 2019 and is expected to grow to $8,493.3 million by 2026. That’s a CAGR of 5.5%.

That means anyone who wants to start a candle making business will be able to sell candles if they put in the effort to develop their skills and start a candle business. Keep reading to learn how to identify the target market when starting your own candle business.

Step 3: Identify the ideal target market

An artist drawing on a white sketch pad

If you want to start your own business selling scented candles, paraffin wax candles, or any type of candle, you’ll want to decide who might purchase them and where you’ll sell them. This requires identifying who your target audience is.

You’ll want to identify the personal characteristics of your target market including:

Age and Gender: Candles tend to be marketed primarily to women over 18, but some men buy them as well. Marketing to children could create a liability because kids aren’t always smart about what they do and candles can create fires.

Their interests

Where they shop: Hint 18.7% of 2020 retail spending was at Amazon and Walmart so anyone considering candle making may want to get listed with their online stores. If you can meet the demand for in-store sales at Walmart, go for it, but you may want to get established before you do that.

Which advertising platforms are best to reach your audience:

  • Teens: Tiktok
  • 20s and early 30s: Instagram
  • mid 30s+: Facebook
  • All ages: Google
  • Wealthy and older generations: Trade publications, investment periodicals, TV

You’ll use the information you gather about who buys homemade candles to drive the marketing strategy and other decisions for your homemade candle business plan.

Step 4: Create a candle business plan

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

  1. Business Plan Cover Page
  2. Table of Contents
  3. Executive Summary
  4. Company Description
  5. Description of Products and Services
  6. Marketing Plan
  7. Strengths, Weaknesses, Opportunities, Threats (SWOT) Analysis
  8. Competitor Data
  9. Competitive Analysis
  10. Marketing Expenses Strategy 
  11. Pricing Strategy
  12. Distribution Channel Assessment
  13. Operational Plan
  14. Management and Organizational Strategy
  15. Financial Statements and/or Financial Projections
  16. Funding

I’m not going to go into all the steps here, but check out our blog about how to write a business plan.

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

Challenges you may face as a candle making business owner

There are several challenges anyone wondering how to start a candle business from home, or anywhere else, will face. The most common challenges are:

Supply chain issues. Jazmin told us:

Supply chain disruptions are my biggest challenge. I order 8-10 times more than I would like because of the supply chain.

Changes in customer behavior. Jazmin told us:

After people started going back to work, I saw a drop in sales and realized it was because they went back to work so I pivoted and expanded to body butters to increase revenue and my candle business revenue jumped right back to where it was before they went back to work.

Keep reading for a candle making business plan template.

Business plan template

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

Alternatively, you can try one of these templates:

The next step in how to start your own candle business is picking a small business name. Let’s discuss that now.

Step 5: Pick a candle business name

There are several key components that go into the creation of a good candle making business name. Some of the primary considerations of picking a business name include:

  • Does the name explain the products your candle business makes?
  • Does the name hint at the business location?
  • Does the name make the business easy to remember?
  • Is the business name easy to spell?

We’ll look at how questions can impact the success of a candle small business.

Be Clear

When picking your candle business name, make sure it clearly states what your business does but avoid being too specific. If Jazmin had named the company Blk Tealight Candles it would have been too narrow. You might want to include the word “candles.”

In the case of Blk Sunflower, the name came from her being in a dark spot when she decided it was now or never. The candle business helped her grow like a sunflower and the symbolism is beautiful. In this case, I think she made a good decision avoiding the word “candle” because she shows a desire to branch out into other categories under the Blk Sunflower brand.

If you don’t share the desire to branch into other categories, it makes sense to include the word candle in the company name. Keep reading for other candle business tips for naming.

Keep it Simple

A small blackboard and a pretty yellow vase with flowers on a desk

Pick a name that is as short and simple as possible. Blk Sunflower definitely meets this one. It’s simple and easy to remember. If it’s too complicated people won’t be able to search it.

Jazmin might have issues with some people trying to spell out the word black because she doesn’t own the domain blacksunflower.com. We’ll discuss this more under the section about domains.

Stay True to Yourself

When starting a private label candle business, make sure the name represents the heart and soul of your company and aligns with the brand you’re trying to cultivate. Based on our interview, it sounds like the name truly represents Jazmin.

Keep reading to learn how domains impact the name you choose when starting a candle business.

Register a Domain

When registering a domain name for your candle making business, always go for a .com. GoDaddy is a great resource for registering a .com domain name quickly and easily.

Jazmin’s business name runs into an issue with this one because she uses an alternative spelling of black and if people go to blacksunflower.com, they will be going to a page about Peter Sempel.

We typically suggest checking this before naming your own candle business because we want to avoid challenges like conflicting names.

Once you’ve decided on your business name, registered a domain, and run it by those who will be honest with you, register it with the government. The SBA provides a useful guide for how to do this.

Step 6: Create a Legal Structure for Small Business Candles

No guide about how to start a candle business is complete without explaining the legal structure that will need to be set up. The legal structure includes forming the business and obtaining any licenses, permits, and insurance you’ll need.

Let’s look at how to make a candle business a legal entity next.

Develop a Legal Structure

There are four primary legal structures that you might set up when wondering how to start a candle making business:

  1. Limited liability company: Form the business with your state’s Secretary of State office by submitting a name, articles of organization, operating agreement, and the submittal fees. They protect you from personal liability as long as you keep personal and business expenses separate. Can be taxed like a sole proprietorship, corporation, or partnership.
  2. Sole proprietorship: Run the business under your social security number and pay on your personal tax return. Some states allow free ones. You assume personal liability. Stay away from these if selling candles cause they can burn houses down.
  3. Corporation: File for incorporation status with your state and obtain an EIN. You’ll have to pay taxes on both a corporate and personal level, but you can avoid dual taxation by offering great benefits or keeping the money in the company.
  4. Partnerships: Like a sole proprietorship, but for 2 or more people.

Read our hub article on how to form a business to learn about more business structure formation.

As you prepare your business structure, concepts like other business licenses, permits, and insurance will also need your thought. Let’s take a look at some of those now.

Obtain Business Licenses, Permits, Tax Forms, and Insurance

A black binder and a calculator on a desk

Depending on your location, you may need a business license, seller’s permit, and business insurance to run your candle making business. Check with your local Small Business Administration office or your Secretary of State to establish the requirements in your location.

A knowledgeable tax advisor is also a good person to have on hand. Who you choose might depend on where you live or how wide you plan to spread your business, but be sure to choose someone you can trust.

Let’s look at what a candle making business will need in terms of funding to be able to make money consistently.

Step 7: Fund your candle business

You’ve learned how to make candles, name a candle making business, and get the business licenses for your business venture as well as the industry, but you’ll also need funding when entering the candle making industry. Let’s look at budgeting for a candle making business.

Budgeting

Budgeting for candle businesses will require thinking about the costs associated with creating the candles, packaging supplies, marketing costs, shipping, and selling online.

As we’ve already stated, the costs of buying candle wax and fragrance oils are relatively inexpensive. Jazmin started selling online for less than $100, but small business owners should be prepared to respond if they meet supply chain challenges.

To overcome supply chain issues you may have to order much larger volumes and/or pay higher priority prices. Jazmin told us:

I buy 10 times the candle supplies as I would otherwise because of the supply chain issues.

You may receive quantity discounts for ordering in bulk.

While you can start small, new business owners might have to choose between:

  • Ordering much more frequently and paying retail prices
  • Ordering 10x as much as you need to get wholesale prices and keep inventory in stock.

Either way, it will reduce the profit margins until the global supply chain issues get corrected.

You’ll need your own e-commerce site, which you can get for under $30/month on Shopify. Jazmin says she uses Shopify to manage all her needs for online sales. If you’ve never set up an e-commerce store before, check out our blog on how to build a website.

In addition, you’ll either need to pay for shipping for each item or a fulfillment center. Jazmin recommends paying for a fulfillment center because it improves the speed of service and makes it easier for small businesses to get repeat customers.

So when researching how to start a candle business, you might plan to cover the following costs during the first year:

  • Materials: $10,000 (This should cover 2,000-3,000 candles based on 9 oz candles)
  • Business Formation/ Licensing costs, Insurance: $1,000
  • Website and other tech: $500-$1,000
  • Fulfillment/Shipping at $8-10/candle sold: $16,000-24,000

That means you should expect it to cost somewhere between $30k-40K to make $108,000. Notice that the shipping costs are as much as the candles cost. If you are able to sell them locally you’ll have much higher profit margins.

Jazmin told us:

I don’t think I would have made it through this holiday season without a fulfillment center. It costs me about $400/month for a shelf and $5/ candle shipped. It honestly saves me money cause I would have had to train someone and it would have slowed me down.

Keep reading for budgeting resources that successful businesses use to manage candle sales and business expenses.

Budgeting resources

A man holding a white note book and a black pen

Making candles can be highly profitable, but given any supply chain issues, you may need to buy in bulk to meet the demand of potential customers. To do that you’ll need some budgeting resources including a business bank account, business debit or credit card, and software to manage inventory and finances.

Business bank accounts and credit cards

Start off by opening a business bank account and business credit card(s). We recommend LendingClub or Novo if you are comfortable with online banks, local credit unions if you plan on operating locally, and Business Advantage from Bank of America if you plan to operate in many states.

If you are using Shopify, they have an option to open a business account directly through them. It’s quick and easy and they do give you a virtual card to use so it’s not critical to have the physical card.

These types of accounts should only be used for the expenses of small businesses. They are to make it easier to manage small businesses and could destroy the liability protection of LLCs and C-corps if you use them for personal finances.

Software for inventory and finances

Most businesses will need software to manage their inventory and finances. Jazmin finds it really easy to manage everything because she does it directly through Shopify, but if you want to use other providers here are some of the most useful software offerings:

Accounting software

  • Quickbooks is familiar to most people who have developed some success in their personal finances
  • Xero can also be used for inventory
  • Sage: PCMag’s choice for best accounting and inventory software

Inventory software

Now that you have some business ideas for managing inventory and finances, let’s look at how to get funding for your candle making business.

Funding

When thinking about how to start my own candle business, funding is going to be a major consideration. While Jazmin started with $110, it’s typically better to have a little more than that when starting. There are a variety of ways to get funding for a candle making business including:

  • Personal funds/personal assets
  • A loan from family or friends
  • Funds from a business partner, but you’ll have to share the profits and it may complicate decision making
  • Government programs offer grants for minorities, women, and economically disadvantaged areas. Check the SBA site to see if you qualify.
  • Crowdfunding is pitching your idea and getting retail investors to fund your company. Check out our interview about Pooch Selfie to learn more about how he crowdfunded it.
  • Credit cards – Be careful because of high-interest rates, but if you can pay the balance each month, this may be a great way of funding.
  • Home equity loan – Taking equity from your home is another option to fund a business especially if current interest rates are lower than your loan’s interest rate. Talk to your mortgage company about the options here.
  • Business loan check out our partners
  • Rollover for business startups (ROBS) requires starting a corporation and a 401K, rolling over your current 401K to the new one, and buying your corporation’s stock. Business Funding Trust and Guidant Financial are two companies that can help with ROBS.

Jazmin told us:

After a few months, Shopify offered me a loan, I accepted it and they just take a portion of my sales each day ‘til it’s paid off.

Check out details on Shopify loans if you are selling on Shopify.

Now that we have covered getting the financials and business formation, let’s look at preparing to open a candle business.

Step 8: What do I need to start 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

Man checking for the right location on iPad

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 own website. Other options include:

  • Retail stores
  • Gift shops
  • Flea markets
  • Your local farmers market
  • Open a local craft store

Jazmin told us:

I market on Instagram and then send them to my Shopify store, where I do 85% of my sales. I also sell some candles in a Seattle coffee shop.

If you decide to open your own store or sell on location, you should probably get commercial property insurance from your insurance agent. This is especially important if you are cooking the paraffin wax melts at the location.

Keep reading for information on hiring employees.

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 the employer.

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 posters 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 enforce workplace safety and 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. Fortunately, Shopify makes it really easy. Jazmin told us:

Shopify handles everything. I manage my inventory, add pictures, and optimize my site for keywords all in Shopify. The only other software I use is Instagram and occasionally Google Ads, but I focus more on Instagram because it generates most of my revenue.

The only software we haven’t really discussed much is Instagram. Most business owners today use it to bring people to their stores. It’s free to use and all you have to do is take attractive photos. We’ll discuss it more in the marketing section.

Create a pricing strategy

A lady holding a black binder

Is candle making profitable?

Jazmin told us:

I make a lot of money for the investment it requires.

Given that she made around $250k this year, I’d say that’s a great living.

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 4 hours making and shipping 200 candles and want to make $100 per hour, that’s $2/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

Blk Sunflower’s pricing is justified because the burn life is longer than most others. She also takes the time to make the candles look awesome. Check out one of her pictures below.

Blk Strawberries & Whipped Cream

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.

Keep reading for the marketing strategy for candle business ideas.

Step 9: Marketing Campaigns for candles

Jazmin told us:

I start by adding some flair to my candles. Then I share the pictures on Instagram. I’ve been really fortunate because a publicist reached out to me because they loved my branding so I’ve been able to get in some major publications.

If you look at the Blk Sunflower Instagram, you can see she’s also a bit of a storyteller. She also uses Instagram stories and Linktree. I especially love what she’s done with Linktree. Check out the picture below.

Screenshot of Linktree

It’s simple but on brand. In addition, it shares her website, the UpFlip interview, a link to her consulting, a video from King 5 Evening YouTube page, and a video review from one of their customers. It’s a great strategy because it presents the diversity of her passion and success on one page and creates a way to track referrals to other sites.

I strongly recommend anyone who is running multiple businesses to adopt this strategy.

Step 10: Sell candles

Now that you’ve started marketing, sales should start coming in. Make sure to fulfill them promptly or hire a fulfillment center. Customer service and quality are two of the main aspects of a business that encourages people to keep coming back.

Wrapping it up

You’ve been given real-world examples of how to start candle making business opportunities. Now you just have to decide if it’s right for you. If you have created your own candles, what are some tips or mistakes you’ve made during your candle making adventures?

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