Tips for Avoiding Margin Drain in Candle Making

Candle making has always been an excellent choice for generating income for individuals and families during tough economic times.There are a number of contributing factors to this:

  • Candle making has a relatively low entry cost.  It is possible with some research and testing to purchase some wax, add fragrance and pour into a container and have a very good quality product.  This candle can then be sold at a local craft show at a pretty nice mark up.
  • Candles have always been a desirable household item because it can serve in various functions in the home, room freshner, home décor and for ambiance in the evening.
  • Since home buying is down dramatically and people are not moving, they are trying to accessorize and redecorate their homes on a smaller budget and candles can fit this criteria.

For many, candle making can be so fun it is easy to lose focus that you are doing this as a source of income.  In part 1 and part 2 we are going to highlight some of the areas that sometimes do not seem like it should be a “margin drain”, but without careful evaluation they could result in not to maximizing your income.

Establish the Right Scent Load

This can be a very tough subject and one that everyone has varying opinions on.  Without doubt we have written numerous times that fragrance is considered the biggest factor in selling your candles and keeping repeat customers.  The key is finding that right balance of fragrance for your candle without adding more than you need.  Adding more scent than you need will be costly and may not be necessary.  This is commonly referred to as the point of diminishing returns (you are adding more fragrance but it does not result in a better product). For many candle makers the tendency is to add morefragrance because you may think there is not enough.  The best thing to do is test your different formulas with friends and neighbors.  Be sure to evaluate the fragrance in a location other than where you pour the candles.  Fragrances can easily take over the room when you pour your candles and when you then try and smell them your ability to sufficiently evaluate can be compromised.  Also it is very difficult for you to be the own judge of the finished product.

When smelling fragrances for to long of a time period your senses can become somewhat dull and you become accustomed to smelling them at stronger doses. While it can be hard, let other people help you determine if your candle smells strong enough.

Set the Right Sales PriceSetting the proper price for your candle might be one of the most difficult tasks in candle making.  There are many issues which must be considered.   Naturally we would all like to sell at the highest price but your target audience might not be willing to pay that price.  On the other side there are consumers who feel if you sell the candle too inexpensively there is something wrong with the product.  For initial guidance on developing your prices be sure to check out our June 2007 Englightner.   Some important considerations must be what is your competitor selling the product for?  What is the target audience that your candles are being sold in?  Can you offer some products at a lower margin in hopes that they buy the higher priced items to go along with their candle purchase.   Depending on the market you are selling at you can also run “specials” in that people like to feel like that are getting value in the product.

Save on Shipping Products

It is always best to try and minimize the number of shipments you make especially when it comes to ordering wax.   Shipping one case each week is much more expensive then 4 cases at one time. Combining additional fragrances you may need later can result in substantial savings.   Also when you can ship by common carrier be sure to “load” as much as possible on the skid.  Many carriers charge flat rates for a skid so the rate is the same if you shipped 500 pounds or 2,000.  Be sure you have all of your products shipped together if you using a common carrier.

Use Everything

​It seems no matter how you do things you will end up with something extra in wax, fragrance and even color. Use your extra wax to make tea lights, fire starters or even tarts. If you have just a little bit of fragrance maybe have a bottle that you start collecting the fragrance.  Have one for all of your florals that you can then call bouquet of flowers. For home baked goods maybe call it Granny’s Kitchen.  Do not discard any of your extra raw materials. They all have some value when put into a finished good. Even if you possibly cannot sell giving them out will get you the attention of someone.

Vendors Can Be a Resource

Quality companies offer services to their customers that can have value. Make sure you use them. If you have a new candle requiring a different wick check to see if you can get a sample (Sorry for the self promotion but could not resist). Candlewic has always provided free wick samples. Rather than just purchasing books, check out the other resources a vendor has to see if there is sufficient information without having to invest in that book. Be sure to take advantage of promotions of the products you use.

Since the summer months are a bit slower the summer months are always a great time to review all of your cost and make sure you have kept up with current prices of products and that you review everything to make sure you are doing everything in the most cost effective manner possible.

One Comment

  1. Due to my love of candles, I am considering making them first as a hobby, potentially, a business.

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