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Me and a friend have been contemplating starting a small candle making business on the side.
Equipment and supplies to make 1,000 16oz candles
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Roughly $5,500(Initial) Exclude $1000(Melter) next batch.
Cost per candle: $3.00-$6.00
Selling price: $10.00-12.00
We were thinking of trying to make a deal with a few stores. The stores wouldn't have to purchase them but only display them and get a percentage of each sell. Of course we would sell to friends and family and maybe set up carts in malls.
Now, I'm not a business man so I know there is something we're missing behind the scenes here. I'm thinking the only flaw is the time it will take to sell them until we find reliable customers. I also figured if it wasn't working out we could just sell them at cost and just get our money back eventually.
My ex and one of her friends did it for a few years. They made mostly votive and other small candles. There was money in it but homemade candles never seem to burn as well as factory made. They never could get that right. A $12 candle better burn right down or you will know about it. Scented votives for a buck or two, people overlook little flaws.They marketed through afternoon and evening home parties. Giving gifts of candles to the hostess based on sales. Christmas was the big season so you're a little late. Valentines is big too. Good Luck!
My ex and one of her friends did it for a few years. They made mostly votive and other small candles. There was money in it but homemade candles never seem to burn as well as factory made. They never could get that right. A $12 candle better burn right down or you will know about it. Scented votives for a buck or two, people overlook little flaws.They marketed through afternoon and evening home parties. Giving gifts of candles to the hostess based on sales. Christmas was the big season so you're a little late. Valentines is big too. Good Luck!
Thanks Ishouldknow, we are definitely going to have to experiment before we start selling.
You're talking about retailing through consignment sales stores. A lot depends upon your local marketplace ... if these stores exist and if they have traffic with interest in your line of product.
That's a lot of "if's" to deal with. I know of several home based artsy-craftsy businesses that yield very good results through this channel, but you'd best visit with the store operators to see if they are open to your product line and what they see as their typical shopper now. Don't forget to ask what their percentage of the gross is ... you may find that your retail price point doesn't allow much margin on your costs of goods sold and also allow you a return on your time and associated costs of keeping inventory in your retail outlets.
IMO, a business such as yours needs to have a 300% mark-up from your costs of goods sold to the retail price point. That allows for a commission split to the store operation, and a ROI (don't forget you've got molds, melting equipment, and other fixed expenses to absorb), packaging equipment/materials, sales literature, disposables, as well as a profit for your labors. If you've got $6 of product invested in each candle, you need to retail that candle at $18 to make a realistic profit for your business. Do your candles have that price point of market appeal? Are you buying your raw goods at a true wholesale bulk price point?
Proper candle wax formulation is no big secret. With a parafin base, you need to select the appropriate additives (stearic acid, etc.) to harden the candle and to enhance the burning characteristics. Good quality wicks are a must at your retail price point, too.
Consider other retail outlets ... craft fairs, antique shows, farmer's markets, flea markets ... to widen your exposure.
Don't sell through consignment. Do a great little website and market on the net (choosing key words in the text that you use over and over again so you stay at the top).
Yankee Candle, the candle empire of New England and probably around the globe, started in its owner's inner city garage when he was a young guy.
You might do a niche such as unscented candles and emergency candles. So many people have allergies these days and can't take the artificial scents.
Not to be a "Nay-Sayer" but...the economy. Most people now, are reduced to buying absolute essentials...and candles are a luxury item, as far as I am concerned. So..and also, what sets your candles apart from the candles I already buy, and are used to? I usually buy candles at Costco, 3 jars, for holidays...Just putting your candles in a jar, is not going to make you any different than the ones already out there. Maybe you need to identify a "niche market" in your area...that markets your candles to a specific target group.
Not to be a "Nay-Sayer" but...the economy. Most people now, are reduced to buying absolute essentials...and candles are a luxury item, as far as I am concerned. .
Candles can also be a survival item, if marketed in such a way that shows keeping a lot on hand is a great idea. Or collaborate with another compatible product.
Candles can also be a survival item, if marketed in such a way that shows keeping a lot on hand is a great idea. Or collaborate with another compatible product.
The OP wants to sale them in the $10~$12 range, you can buy candles for a fraction of that cost for emergencies.
What is going to justify the high price? What is going to differentiate your candles from the ones that you can find at any department store? Without a very noticeably novelty the price seems too high. Also, most stores are going to wait 50%, so that isn't going to leave you too much profit if it actually costs $3~$4.00 to make them.
Also, I don't see any reason why you'd have to make 1,000 candles to start with, you just need to make a few to start with and make more as they sale. Now you may not be making a lot of money for your time, but it will greatly reduce any potential loss if your idea doesn't work out. You can make the operational more profitable as you get more sales.
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