If you have a passion for candles and you enjoy making them yourself, a candle business could be a great way to pursue your passion and earn money. Not every candle business is a success, but if you set yours up the right way, you can get started in your own home and watch your business grow into a thriving venture.
If you want the flexibility of running your own candle business, there’s never been a better time to jump in: the candle industry is expected to grow significantly over the next decade.
In this guide, I’ll walk you through everything you need to know to get started. By following these steps, you can avoid common mistakes and misconceptions and set your business up to succeed.
11 Steps to Start A Candle Business
1. Plan Your Offerings
Before you get started, you’ll need to decide if you’ll make your own candles, sell candles sourced from elsewhere, or use a dropshipping model. Creating your own candles will make them unique and personalized, but it can be more time-consuming than sourcing inventory and branding it yourself.
If you do decide to make your own, you’ll want to work to perfect your candle making recipe, scents, and designs. This can mean the difference between growing your business or ending up belly up before the first year is up. If you’re not going to be making your own candles, you’ll want to find a supplier that produces exactly the types of candle you want.
There are many candle options available, so know what sets yours apart and focus on that. Whether it’s a unique scent, funky shapes, or your service type (subscription candles, anyone?), honing in on your business proposition and your target market early will help you determine your business plan.
2. Scope Out the Competition
Between established brands, independent online sellers, and local trade shows, there is a lot of candle-making competition out there.
It’s a good idea to take a realistic look at what the market looks like. Browse online candle-making forums, look up figures around candle revenue, and even ask friends and family what they think of the market, if they are candle buyers.
Specifically, seek out your direct competition. For example, if you’re planning on targeting men with natural-scented candles, look for other candle companies that target men to get a sense of their branding and voice. This can help you understand your audience and determine how to differentiate yourself as a seller.
3. Draft Up a Business Plan
No business is complete without a clear and organized structure and strategy. That’s where a business plan can really help. While your plan doesn’t have to be set in stone or be overly complex, it should lay out the general goals, strategies, and other important aspects of your business.
A business plan is great for your own use, but also important if you want to obtain a business loan or other investment. Here are some details to include:
- An overview of your business: It’s good to list the reasons you want to start this business and what you hope to gain.
- Where you plan on selling: Many candlemakers sell both online and at events like farmers’ markets.
- What products you’ll offer: While you’ve probably done this work upfront, now it’s time to solidify it in your business plan.
- Your marketing plan: How you’ll differentiate yourself from your competition to increase profitability.
- Your growth strategy: How do you plan on scaling up your business? Will you hire more employees, outsource work, or increase offerings?
4. Register Your Business
For any new candle business, getting a business license and registering as an LLC or other legal business entity is one of the most important steps. The specifics will vary by location, but registering for an LLC and getting a business license will ensure you are operating legally.
If you plan to expand and hire additional staff, you’ll also need an Employee Identification Number. This will allow you to open a business bank account as well, to keep your finances separate, which is vital come tax time.
Finally, you’ll need to consider business insurance. Depending on your location, you may be required to obtain coverage such as liability and commercial property insurance, but it’s always best to get a comprehensive plan, should anything ever go wrong.
5. Source Supplies
Whether you’ve decided to create your own candles from scratch or buy pre-made candles, you’ll have to source supplies. Here are some things you may need:
- Tools like aluminum pour pots and thermometers
- Glass jars
- Packing materials
This can be a big upfront cost, so be sure you have the funds to be able to have enough stock on hand at any given time. You don’t want to disappoint potential customers by constantly being out of stock.
Look for suppliers and wholesalers that can provide what you need for cost-effective prices. Establishing a solid relationship with a supplier early on will keep your business running smoothly, with fewer hiccups.
6. Build Your Website
No matter where you’re planning on selling your candles, it’s a good idea to have your own website. These days, you can use a website builder to set up your own ecommerce site, even if you don’t have any technical experience.
Having your own website doesn’t have to cost more than a few dollars a month, and you can avoid commission fees, like you’d have to pay on online marketplaces. Those fees can add up quickly.
Plus, having your own website allows you to completely control your branding, and provide you with a better chance at interacting directly with your customers. It also makes it look more professional, and can increase your online visibility.
7. Figure Out Your Pricing
Most handmade candles range anywhere from $10 to $40 each. There are three main candle markets, so when determining your prices, it’s vital you know where your candles sit.
- Prestige/luxury market: Companies that sell these high-end candles often put an emphasis on branding, specialized fragrances, and design. The candles usually sell for more than $30, but can be upwards of $100 in the right market.
- Mid market: These candles may not be considered “luxury,” but the companies that make them usually still employ strong branding that appeals to consumers with moderate budgets. They’re often marketed as a step above mass-produced, while still being affordable. They tend to range between $10-30 a candle.
- Mass market: Mass market candles are usually run-of-the-mill scents in generic packaging. They are the ones that are mass produced and are sold at box stores and big retailers. They usually sell for around $5-10 each.
8. Set Up a Payment System
Knowing how you can accept payments from your customers is an important aspect of any business. It’s always a good idea to offer several different payment options, so your customers can pay however they prefer.
When you set up an account with Pay.com, you can choose from a wide variety of payment methods, including credit cards, debit cards, PayPal, Google Pay, Apple Pay, and many more! Your customers can also provide their credit card details over the phone.
9. Determine Shipping Methods
Selling online comes with the benefit of not needing a physical storefront, but it does come with its own challenges, including shipping costs.
First, determine how far you are willing to ship (within your country only or internationally, for instance). Then, do you research to find out how much you’ll need to charge for shipping. You may want to consider offering free shipping while your business is still new.
Businesses can often get special rates with couriers, so be sure to compare different options to find the best one that works for your product.
You’ll also need to figure out how you’re going to pack your candles for shipping. As candles are often fragile or come in odd shapes, it’s imperative to be able to securely ship them without damage. Otherwise, you risk losing your reputation and having to deal with unhappy customers.
10. Market Your Business
One you’ve done all the preparation and you’re ready to launch your business, you’ll want to put your marketing plan into action. There are many ways to market your business, but it’s important to know your target audience and how you can reach it.
If you plan to sell online only, you’ll want to look at ways to increase traffic to your site. This can come from SEO content marketing tactics, paid search ads, or building a brand identity on social media, for example.
If you’d like to sell offline as well, local craft shows and events can be a great opportunity to interact face-to-face with your customers, learn what they like, and promote your brand from a personal perspective.
11. Start Selling
Once you’ve sorted out all the details, built a website, and signed up with a secure payment service provider, you’re ready to open for business.
Launch your site and be sure to promote, promote, promote, to really get the word out about your candles.
The Pros and Cons of Starting Your Own Candle Business
- You can start your business at home
- It’s easily scalable
- It’s a simple business model with high profit margins
- It has a lower upfront cost than other businesses
- There is a lot of competition
- Breaking into the market can be a challenge
- Finding a good supplier can be tough
- Difficult to build customer loyalty
The Bottom Line: Is Starting a Candle Business Right for You?
Whether you’re looking for a fun side hustle or a full-blown business, selling candles can be a great way to embrace your entrepreneurial spirit. However, it’s important to weigh the pros and cons, and look at the long term market viability before diving straight in.
Candle businesses have relatively low upfront costs, as supplies are generally cheap and you can work from home. You can easily start selling online and even accept credit card payments on your own website.