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How To Start A Candle Business

How To Start A Candle Business

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How To Start A Candle Business

How to start a candle business

Candles add beauty and wonderful smells to homes; they’re ideal for enhancing an environment and make great gifts. If you love candles and are crafty, then you may have even tried making them in the past. But have you considered that you could turn this hobby into a business? Candlemakers have the opportunity to bring their ideas to life, using their creativity to come up with something new and exciting that others will want in their homes. Best of all, you can start a small candle business right out of your home, saving money on expenses like rent and allowing you to grow the business gradually. Think candle making might be the business opportunity for you? Read on to find out just what’s involved with this venture.

Business Overview

Candle businesses usually specialize in creating particular types of handmade candles. Some may create jar candles, while others may make specialty candles that are inspired by certain scents or places. Candle businesses may focus on hand-made candles from materials such as beeswax, soy wax, paraffin, or gel. At the same time, larger operations often make candles in big batches, using machinery to keep up with the high volume.

These businesses are run in many different ways. Smaller operations can be run out of a home kitchen, with business owners selling at a booth at craft shows and flea markets. Some business owners open actual storefronts or shops, some sell through boutiques and gift shops, while others sell online through their own website or Etsy. There are many different business models in this industry, which means business owners can choose to run their businesses in the ways that best complement their lifestyle and business goals.

Starting a candle business is a journey, so don’t expect overnight success. Plan to experiment with different designs and scents and different marketing and retail options until you find something that works for you. Most importantly, focus on creating a brand and products that are easily recognizable and stand out as unique from other candle makers.

The candle manufacturing industry has been experiencing slow but steady growth over the last several years. It is estimated that in 2023, the industry will generate approximately $2.8 billion in annual revenue in the United States​​.

The candle manufacturing industry’s future appears promising, with positive growth projections indicating a healthy and expanding market. One factor in the growth of the candle market is the rise of self-care trends and mental well-being awareness, as candles are often used to create a cozy environment at home, and many consumers use candles as part of their self-care routines. [2]

The candle industry is constantly affected by changing and new trends, such as fragrances, colors, jar types, and even wax formulations. Sometimes, these trends evolve together – for instance, fragrances and colors are often closely linked. One trend that’s increasing in popularity in all industries that candle makers should be aware of and embrace is an increased focus on sustainability. Candlemakers can embrace this trend by reusing wicks, repurposing jars, and sourcing sustainably farmed wicks and materials. It’s important for candle makers to be aware of trends and quickly adapt to customers’ desires. Sometimes, taking inspiration from trends and then finding a way to do things differently can pay off in increased sales.

In addition, candle therapy, has been gaining interest as it is believed to relieve back pain, osteoarthritis, headache, and anxiety. Similarly, restaurants and fine dining spaces have been increasingly using luxury candles to create a beautiful and aromatic ambiance for their customers. In addition, candles have great significance in celebrations, religious ceremonies, get-togethers, and festivals.

Consumers are also placing increased importance on experiences. Consumers may use candles to create experiences in their homes, carefully choosing candles for their colors, the light they give off, and their scents. Using wooden wicks can further enhance this experience since these wicks crackle as they burn.

Candle trends are sure to continue to evolve, and many of them emerge on Pinterest before they hit the stores. Candlemakers can use social media to stay aware of the new trends they may want to incorporate into their business.

Steps To Start A Candle Business

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If you’re thinking about starting a candle making business, it’s important to do your research first. Here is a checklist to help you get started.

Step 1: Research the Market

Starting your business, but before spending any money, you need to be sure there is a market for your candles. Here are some tips on a few things to research:

Identify your target market: Who are your potential customers? Are they young, middle-aged, older? Are they primarily women or men? What’s their income level? Understanding your potential customer base will help guide your product development and marketing strategies.

Analyze your competitors: Look at the other candle businesses, both local and online, that are focusing on the same market. What products do they offer? What are their price points? What do their customers like about them? What do they dislike? This can help you understand what’s already out there and where there might be gaps in the market that you can fill.

Survey potential customers: Once you have a general idea of your product offerings, consider surveying potential customers. This can give you direct feedback on what they’re looking for in a candle, how much they’re willing to pay, and other valuable insights.

Online Research: Use online tools to conduct your market research. This could include using a tool like Google Trends to see how often people are searching for certain types of candles, or looking at social media to see what kinds of candles are trending.

For instance, soy candles have gained popularity in recent years due to their eco-friendliness. Looking at industry reports, attending trade shows, and following industry influencers and blogs can help you stay on top of these trends.

Also, check out online marketplaces like Etsy and Amazon and look at what kinds of candles are selling well, read reviews to see what customers are saying, and look at pricing information.

Remember that the goal of market research is to understand your potential customers and the existing market so you can create a product that meets a need and can compete successfully. It’s an ongoing process, not a one-time task. As you start your business and as it grows, you’ll want to continually reassess the market and your place in it.

Step 2: Define Your Business Concept

Now that you understand who you are selling to, it’s time to define your business concept as it sets the direction for your business and provides a clear idea of what your business stands for. This can include:

Finding your Unique Selling Proposition (USP): As a new candle business, it’s essential to differentiate yourself from the competition. What makes your candles unique? It could be anything from the type of wax you use, the scents, the design, or the overall aesthetic. Maybe you focus on eco-friendly materials, customizable options, or locally sourced ingredients.

Value proposition: Clearly define the value your candles will provide to the customer. Is it relaxation, a unique decor element, a perfect gift, or a scent that brings back memories? This value proposition should be at the core of your business concept.

Define your brand: Your brand is more than just your logo or tagline; it’s the personality and promise of your business. What values do you want your business to embody? It could be quality, luxury, sustainability, or affordability. These values should be reflected in everything from your product design to your customer service.

Think about the customer experience: How do you want customers to experience your brand? This includes everything from the buying process to how they feel when they light one of your candles. Aim to create a memorable, positive experience that will keep customers coming back.

Stay true to your passion: Last but not least, remember why you wanted to start a candle business. Your passion for the craft, for creating something beautiful and enjoyable, should shine through in your business concept. If you’re passionate about your business, it will resonate with your customers.

Take the time to write down your business concept, refine it, and make it as clear as possible. It will serve as a guidepost as you make decisions about product development, marketing, and other aspects of your business. Some tools to do this include a business plan or business model canvas.

Step 3: Practice Your Craft

Even if you have some experience in candle making, it’s always beneficial to continue learning and honing your craft. One of the most effective ways to do this is by enrolling in a professional candle-making course. Many online platforms, such as Udemy or Skillshare, offer a variety of free to inexpensive courses that range from beginner to advanced levels. These courses not only teach you the technical skills needed for candle making but also delve into topics like safety practices, industry trends, and advanced techniques. In addition, Amazon offers several books on the subject.

In addition to formal courses, watching candle-making tutorials can be extremely valuable. Platforms like YouTube are filled with videos from different candle makers around the world. These tutorials can provide you with a range of techniques and approaches, and they can also serve as a great source of inspiration for your own work.

However, nothing beats hands-on practice. Regularly making candles will help you refine your techniques, discover your unique style, and ensure consistent quality. It’s also the best way to test different waxes, scents, and wicks to find what works best for you and your target market. This is also a time to confirm that running a candle business is something you truly enjoy. Starting a business requires a significant investment of time and energy, so it’s important to ensure that you’re passionate about the work. By immersing yourself in the candle-making process and continuously learning, you can not only develop great products that customers will love but also build a business that brings you fulfillment.

Step 4: Register the Business

The next step in starting your candle business is to make sure it’s properly registered and legal to operate. It’s important to note, however, that the exact process can vary from state to state, so you’ll need to check the specific requirements for your location. Here’s a general guide to the key steps:

Form a Business Structure: The first thing you’ll need to decide is what legal structure is best for your business. This could be a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Each of these structures has different implications for liability, taxes, and administrative complexity. Many small business owners opt for an LLC because it provides personal liability protection and has fewer administrative requirements than a corporation.

Related: Comparison of business structures

Register Your Business Name: Next, you’ll also need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state. During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain Business Licenses and Permits: Depending on your location and the nature of your business, you may need certain licenses or permits to operate. This could include a business license, sales tax license, Employer Identification Number (EIN), and in some cases, even a home-based business permit.

some trends that all candle makers should be aware of and embrace. An increased focus on sustainability is influencing all industries, including candles. Candlemakers can embrace this trend by reusing wicks, repurposing jars, and sourcing sustainably farmed wicks and materials.

Related: State Gudies to business licensing

Remember, this is a general guide. For detailed information tailored to your state, you should consult the guide we have available on the steps to register a business in every state. It’s also advisable to consult with a business lawyer or accountant to ensure you’re meeting all the legal and financial requirements for your business.

Step 5: Find Suppliers

Many suppliers won’t give pricing information until the business is officially set up, so now that the business has been registered, it’s time to begin finding suppliers. Some tips on finding good suppliers include:

Determine Your Needs: Before you start looking for suppliers, clearly define what you need. This includes the type and quantity of wax, wicks, fragrances, dyes, containers, and any other materials you’ll use.

Research: Start by conducting an online search for suppliers. You can also check trade publications or attend trade shows for candle supplies. Look for suppliers who specialize in candle-making materials, as they will have a wide selection and deep industry knowledge. Some candle supply stores will have minimums, so another alternative are craft stores like Hobby Lobby or Michaels, but they aren’t typically as high quality, which may be fine in the beginning while starting out.

Samples: Once you’ve identified potential suppliers, order samples of their products. This allows you to assess the quality before committing to a larger order.

Reliability: Check the supplier’s reputation. Look for reviews or testimonials from other customers. You want to ensure they deliver on time and provide good customer service.
Cost: While cost is a factor, it shouldn’t be the only one. Choosing the cheapest supplier might mean compromising on quality or reliability, which can cost you more in the long run.

Local vs. Overseas: You may be considering whether to source locally or from overseas. While overseas suppliers might be cheaper, there can be issues with communication, shipping times, and customs.

Remember, your suppliers are a key part of your business. Take the time to find reliable ones that provide quality materials and are a good fit for your business needs.

Step 6: Find Financing

Things are starting to get real, and it’s time to make sure you have the funding in place to get started.

Fortunately, a candle business can be very inexpensive to start, so if you have enough savings, you may choose to fund the business yourself. This is the most straightforward way to finance your business, as it doesn’t involve interest or sharing your profits.

If you need some additional investment to get started, there are a few options:

Friends and Family: You might consider borrowing money from friends and family. They are more likely to trust you and may offer more favorable terms than professional lenders. However, this can lead to strained relationships if the business doesn’t go as planned.

Small Business Loans: Many banks and financial institutions offer conventional financing or Small Business Administration guaranteed loans designed for small businesses.

Crowdfunding: Platforms like Kickstarter and Indiegogo allow you to raise money by pre-selling products or offering rewards to backers. This can be a great way to raise funds and build a customer base at the same time.

Remember, each funding option comes with its own set of advantages and disadvantages. It’s crucial to carefully consider each and choose the one that makes the most sense for your business and personal situation.

Related: Finding the money to start a business

Step 7: Set Up Operations

Setting up operations for a candle business involves several considerations based on your target market and business model. Here are a few things to consider:

Home-Based Operations: Many candle business owners start their operations from home, especially if they are working on a smaller scale or just starting out. This eliminates the cost of renting a separate space and allows you to work flexibly. However, you need to ensure you have enough space for production and storage. You also need to check local zoning laws and HOA rules, as some places have restrictions on running a business from home.

Renting a Commercial Space: If you are planning a larger operation or if your home isn’t suitable, you may need to rent a commercial space. This could be a retail space if you plan on selling directly to customers, or it could be a studio or warehouse for production and storage. When choosing a space, consider factors such as size, layout, cost, location, and accessibility for deliveries.

Shared Workspaces or Makerspaces: Another option could be a shared workspace or makerspace. These are communal spaces where small business owners can rent a desk or a workshop. They can be a cost-effective solution and offer opportunities for networking and collaboration. However, they may have limitations on the type of work and the hours you can operate.

Online: If you’re planning to sell your candles online, your location needs might be minimal. You may only need a space to create and store your candles and a small area to manage packing and shipping.

Remember, safety is paramount when making candles, so your space needs to be well-ventilated and equipped with fire safety equipment. Also, as your business grows, your space needs might change, so it’s important to stay flexible and reassess your situation as needed.

Step 8: Figure Out Pricing

Determining pricing is a key aspect of your business strategy and can significantly impact your profitability. Some tips on pricing a candle business include:

Cost of Goods Sold (COGS): After working with your suppliers, be sure to calculate the cost of producing each candle. This includes the cost of all materials (wax, wick, fragrance, dye, container), direct labor costs, and any other direct costs associated with the production.

Overhead Costs: Next, factor in your overhead costs. These are the ongoing expenses of running your business that isn’t directly tied to the production of each candle, such as rent, utilities, insurance, and marketing. Determine your monthly overhead and divide it by the number of candles you expect to sell in a month. This will give you the amount of overhead cost to allocate to each candle.

Profit Margin: Decide on the profit margin you want to make on each candle. This is typically expressed as a percentage of the selling price. For example, if you want a profit margin of 50%, you would price your candles at twice the cost to produce them.

In the video with Baroque Candle Co., Natalie recommends selling candles at three times the cost of goods.

Competitor Pricing: Research what similar products are being sold for in the market. This gives you an idea of what customers are willing to pay and helps ensure your pricing is competitive. However, don’t undersell your products just to match a competitor’s lower price point. If your candles offer unique features or higher quality, it’s reasonable to price them higher.

Value Perception: Pricing also affects the perception of your candles. If you price them too low, customers might question their quality. If they’re priced too high, it might deter potential buyers. You want to strike a balance where customers perceive your candles as good value for the money.
Remember, pricing is not a one-time decision. It’s important to revisit your pricing strategy regularly and adjust as necessary based on changes in costs, competition, and customer feedback.

Step 9: Marketing Strategy

Marketing is crucial for any business, including a candle business, as it helps you reach your target audience, establish a brand, and generate sales. While there are a lot of ways to market a business, let’s go over some tried and true methods.

First, having a well-designed, user-friendly website is vital. It serves as a platform where you can showcase your products, tell your brand story, and facilitate purchases. In today’s digital age, a majority of customers first interact with a business online, so your website is often the first impression they get of your business.

If you plan on an online-only business, having a great website is even more important.

Social media marketing is another powerful tool. Platforms like Instagram, Pinterest, and Facebook are particularly effective for a candle business because they’re visual-centric. You can post appealing photos of your candles, share behind-the-scenes glimpses into your candle-making process, and create engaging content to build a relationship with your audience. You can also use these platforms to collaborate with influencers in your industry for greater reach.

While online marketing is important, it’s also a good rule not to overlook offline marketing strategies. Participating in local craft shows or farmer’s markets is a great way to engage with your local community, build brand awareness, and get direct feedback from customers. Collaborating with local businesses or hosting workshops are also effective ways to gain visibility.

Whether operating online or off, email marketing can be a powerful tool to stay connected with your customers. Sending newsletters with updates, new product announcements, or special offers can help keep your brand top-of-mind for customers. According to the National Candle Association (NCA), in the U.S., 35% of all candle sales occur during the Christmas/holiday season, so having a timely email should help generate sales that may not have happened without it. [3]

Last, remember that word-of-mouth is one of the most effective forms of marketing. Providing excellent customer service and quality products will encourage customers to recommend your business to others. Excellent customer service, seeking customer feedback, and showing appreciation for their support can result in repeat business and referrals.

In conclusion, a multi-pronged approach utilizing both online and offline strategies can help effectively market your candle business. It’s also important to regularly evaluate and adjust your marketing strategy based on what works best for your specific business and target audience.

Step 10: Prepare to Launch

As you move closer to launching your candle business, there are likely a few loose ends to tie up. While this list may not include everything you still need to do, here are some common things to check on that I recommend to new candle business owners:

Insurance: Don’t underestimate the importance of having the right insurance. At a minimum, you will need general liability insurance to protect against claims of bodily injury or property damage. Additionally, product liability insurance is crucial in case a customer claims to have been harmed by one of your candles. Depending on your business structure and location, you may need additional types of insurance.

Related: What types of insurance do candle businesses need?

Bookkeeping: Establish a solid bookkeeping system from the start. Accurate financial records are crucial for tracking your business performance, preparing for taxes, and making informed business decisions. You may choose to do this yourself using accounting software, or hire a professional accountant.

Related: Setting up the bookkeeping for your first business

Payment Systems: Make it easy for customers to buy from you by accepting credit cards. There are many payment processors to choose from, so do your research and choose one that offers good rates and reliable service. Also, consider offering other payment options like PayPal or Apple Pay to cater to different customer preferences.

Hiring Employees: If you need to hire employees, take the time to understand employment laws and best practices for hiring and managing staff. Make sure you’re ready to take on the responsibilities of payroll, employee benefits, and legal compliance.

Related: How to hire your first employee

Continuous Learning: Stay curious and keep learning. The candle industry is constantly evolving with new trends, techniques, and regulations. Attend workshops, follow industry blogs, and join candle-making communities to stay informed.

Adaptability: Be ready to adapt to unexpected challenges. Running a business is a dynamic process, and your ability to adjust your plans and strategies when necessary can be a key factor in your success.

Self-Care: Don’t forget to take care of yourself. The demands of running a business can be intense, and it’s important to take time for rest and relaxation. Don’t hesitate to seek help when you need it.

This material is property of StartingYourBusiness.com

Greg’s Tip: Remember that candle-making is an art. It might be tempting to go all in right away, but it’s often better to start small (and make small mistakes) and learn the craft before trying to make it a business. There are plenty of online resources, workshops, and classes that can help you get started.

Greg's Business Tip

Candle Business FAQs

How much does it cost to start a candle business?

It’s challenging to provide an exact figure for the cost of starting a candle business as it can vary significantly. However, a reasonable estimate for starting a small-scale candle business could range from a few hundred to tens of thousands of dollars.

The cost of starting a candle business can vary depending on various factors, such as the scale of your operation, production methods, location, and the complexity of your product line. By conducting thorough research, creating a detailed business plan, and obtaining quotes from suppliers and service providers will help you develop a more accurate cost estimate.

Here are some key expenses to consider when estimating the cost of starting a candle business:

Equipment and supplies: This includes the cost of candle-making equipment like melting pots, scales, thermometers, molds, containers, wicks, fragrance oils, dyes, and other necessary supplies. This is typically where the majority of funds are spent.

Workspace or manufacturing facility: If you don’t already have a suitable workspace, you may need to consider the cost of renting or purchasing a facility. This cost will vary depending on factors such as location, size, and lease terms. It’s important to factor in utilities, insurance, and any necessary permits or licenses associated with the facility.

Packaging and labeling: Designing and producing appealing packaging for your candles can require additional investment. This includes the cost of materials, graphic design services, printing, and labeling. The cost will depend on the complexity and quality of your packaging design.

Inventory and raw materials: You’ll need to estimate the cost of purchasing an initial inventory of raw materials such as wax, fragrance oils, wicks, and other components required for candle production. The inventory cost will depend on the size of your product line and production capacity.

Branding and marketing: Developing a strong brand identity and marketing strategy is essential for success. Consider the cost of logo design, website development, marketing materials, online advertising, social media campaigns, and other promotional activities to create awareness and attract customers.

Legal and administrative expenses: Starting a business involves certain legal and administrative costs, such as business registration fees, obtaining necessary licenses and permits, trademark registrations (if applicable), and consulting fees for legal or professional advice.

Packaging and shipping: If you plan to sell your candles online or through retail channels, consider the cost of packaging materials, shipping supplies, and shipping fees. This includes boxes, bubble wrap, labels, and postage or courier charges.

How much can a candle business owner make?

A candle-making business’s profits will depend on that business’s size, the number of employees, any specialty areas that the business focuses on, and even how the business sells candles, like selling wholesale or retailing candles directly to customers.

The potential earnings of a candle business can vary widely and are dependent on numerous factors. It is challenging to provide an exact figure without specific information about the business. However, to give a general estimate that isn’t unrealistic for a new business, let’s consider a simplified formula:

Annual Revenue = Average Price per Candle x Number of Candles Sold per Year

For instance, if you sell 500 candles per month at an average price of $15 per candle, the annual revenue would be:

Annual Revenue = $15 x 6,000 = $90,000

If we consider the pricing strategy of Baroque Candle Co., where candles are priced at three times the cost to make, we can calculate the net profit by subtracting the total expenses from the annual revenue. Let’s assume that the cost to make a candle is $5 in this scenario.

Next, we can calculate the Gross Profit, which is found by subtracting the cost of goods sold (COGS), which is typically the biggest cost for a candle business. To get this number, we multiply the cost of making a candle by the number of candles sold:

COGS = Cost to Make a Candle x Number of Candles Sold per Year
COGS = $5 x 6,000 = $30,000

Now, we can calculate the Gross Profit:
Gross Profit = Annual Revenue – COGS

Gross Profit = $90,000 – $30,000
Gross Profit = $60,000

Please note that this is a basic calculation and does not account for expenses such as marketing, packaging, overhead, and other operational expenses. Deducting these costs from the revenue will provide a clearer understanding of potential profits.

How do I create appealing packaging for my candles?

There are a number of elements that go into packaging.

Understand your target market: Conduct thorough market research to gain insights into your target audience’s preferences, lifestyle, and buying behavior. This will help you tailor your packaging design to effectively appeal to their tastes and desires.

Differentiate your brand: Identify what sets your candle business apart from competitors and use packaging as an opportunity to communicate your unique selling points. Consider factors such as high-quality ingredients, sustainability, craftsmanship, or a compelling brand story. Incorporate these differentiators into your packaging design to create a memorable and distinct brand identity.

Focus on visual aesthetics: Invest in visually appealing packaging that catches the eye and evokes the desired emotions in your target customers. Consider elements such as color palettes, typography, graphics, and imagery that align with your brand and resonate with your audience. Ensure that the overall design creates a cohesive and visually pleasing experience.

Reflect your brand identity: Your packaging should align with your brand’s personality, values, and positioning. Whether you aim for a luxurious, rustic, minimalist, or playful image, make sure the packaging design conveys that identity consistently. Use typography, imagery, and other visual elements that reflect your brand’s essence and engage your target customers.

Prioritize clarity and information: While aesthetics are important, it’s crucial to provide clear and essential information on your packaging. Include the candle’s name, scent, burning time, and any relevant safety instructions or certifications. Make sure the information is legible, easy to find, and presented in an organized manner.

Consider packaging functionality: The packaging should not only look great but also serve a practical purpose. Ensure that it provides adequate protection to the candles during transportation and storage. Consider user-friendly features, such as easy opening and resealing mechanisms, that enhance the overall experience for your customers.

Use high-quality materials: Invest in quality packaging materials that align with your brand positioning and enhance the perceived value of your candles. Consider options like premium paperboard, sustainable materials, or custom-designed containers that elevate the overall packaging aesthetics.

Test and gather feedback: Before finalizing your packaging design, conduct small-scale tests or focus groups to gather feedback from your target audience. This will provide valuable insights into their perceptions, preferences, and any improvements that can be made to optimize the packaging appeal.

Be consistent across channels: Ensure that your packaging design aligns with your overall brand image and is consistent across all marketing channels, including your website, social media, and physical stores. Consistency helps build brand recognition and strengthens the connection between your candles and your customers.

What is the NAICS code for candle making?

The NAICS code for a candle business is 339999, which is categorized under All Other Miscellaneous Manufacturing.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?


[1] IBISWorld Candle Manufacturing in the US
[2] Grand View Research – Candle Market Size, Share & Trends Analysis Report
[3] National Candle Association – Industry Facts & Figures

How To Start A Candle Business

How To Start A Candle Business

2 Responses

  1. I’m looking to start a candle making business from home and wanted to know what licenses or permit I need to obtain in New York.

    1. Here is information on the common licenses needed in New York. You will want to check with your local requirements, in addition to:
      the Sales Tax Certificate of Authority – https://startup101.com/how-to-register-for-a-sales-tax-certificate-of-authority-in-new-york/ and Resale Certificate – https://startup101.com/new-york-resale-certificate/

      Also, if you start as a sole proprietorship and operate under a business name, you will need to do an Assumed Name Registration – https://startup101.com/how-to-register-a-new-york-dba/

      Hope this helps. Let me know if you have any questions!


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