Whether you want to elevate candle making from a personal hobby to a more advanced level or venture into establishing a new business, you are in the right spot. This detailed guide on starting a candle business will cover all the essential information you require.
Can you explain what a candle business is?
Operating a candle business entails creating, promoting, and selling candles. These businesses come in different sizes, ranging from small artisanal endeavors to large manufacturing corporations. An example of a famous case is Yankee Candles, which was established by a young person aiming to craft a personalized gift for their mother.
If you have a passion for candle-making and want to turn it into a thriving business, this guide will walk you through the key steps to get your candle company off the ground.
From developing your product line to crafting a marketing strategy, we'll cover the essential elements you need to build a successful candle business. Whether you're just getting started or looking to expand an existing operation, this informative blog post will provide the roadmap you need.
A candle business is a great idea for an eCommerce business due to several reasons.
There are several compelling factors that contribute to the viability of a candle business as an eCommerce venture.
Cost-Effective Startup: Candle-making requires minimal tools and equipment to begin. With modest startup capital, you can commence your venture today (although upgrading to premium materials may be beneficial later on). This stands in contrast to the typical expenses associated with starting a business. Additionally, exploring candle dropshipping is advisable.
Accessible Learning Opportunities: A plethora of complimentary online resources, recipes, and tutorials are available to assist in mastering the art of candle-making (such as the convenient resource hub provided by the National Candle Association). You have the freedom to explore various fragrances, containers, waxes, and wicks at your own pace, allowing you to personalize your candles to your liking.
Above-average profit margins: Items that cost only a few dollars to produce can usually be sold at a markup of 25% to 50%, which makes operating expenses quite manageable.
8 steps to start a candle business
Gain expertise in the art of candle making
Moreover, as you create more and more candles, you’ll learn to:
To transition from using a candle-making kit to expanding production, it will be necessary to upgrade to more advanced equipment such as a 4-lb pour pot or a Presto Pot. These professional tools are designed to accommodate larger volumes than what a kit can handle.
Develop expertise in the craft: Instead of dividing your attention between mastering the art of candle-making and managing a business, it is advisable to concentrate on honing your skills in candle-making initially (and validating your passion).
Conduct comprehensive testing on different elements of your candles: With every production batch, it is essential to evaluate factors like fragrance, safety, burn duration, and other relevant aspects to refine your preferred formula.
In the process of scaling up production, it is imperative to meticulously select dependable suppliers to ensure the efficient sourcing of materials. This necessitates a comprehensive grasp of the procurement procedures, thorough exploration of both local and online sourcing avenues, and dedicating sufficient time to conduct meticulous research and comparisons.
Diversify your candle selection: By crafting a total of 84 candles, you can delve into a wide range of wax varieties, colorants, scents, and candle styles (such as pillar candles, container candles, wax melts, etc.) to enrich your product line.
Step 02: Select your niche and establish your brand
Prior to introducing your candles to the market, it is essential to determine the target audience, unique selling points, and the reasons driving your candle niche.
Consider the following questions:
What is the reason for launching a business: Share the story of your brand and the overarching vision that drives your motivation.
Identifying Your Target Market: Are you aiming to market premium candles for exclusive distribution in luxury boutiques and high-end stores? Alternatively, are you seeking to cater to a broader audience by offering candles with cost-effective packaging and containers?
Identifying Your Target Audience: Your ideal customer demographic may include professionals between the ages of 20 and 35 seeking premium candles to enhance their home workspaces. Alternatively, your target market could comprise outdoor enthusiasts aged 35 to 60 in search of scented candles that also repel insects.
Setting Your Candles Apart: Ensuring that your candles are crafted with non-toxic ingredients, feature delightful scents, and support a cause you are passionate about are essential elements in defining your unique selling proposition (USP). This strategic differentiation is key to distinguishing your brand and standing out in a competitive market.
After you have responded to these inquiries, you will find it simpler to determine the way to materialize your vision. By choosing the candle varieties you wish to sell and creating a brand for your online shop, having a distinct niche and brand identity can accelerate your progress.
After making a decision, the subsequent crucial step involves conducting market research. In the context of a candle business, market research entails a thorough analysis of consumer preferences regarding scents, types, and styles of candles. Additionally, it is advisable to delve into identifying target demographics and evaluating competitors. Exploring craft trends, such as the increasing demand for eco-friendly and handmade products, holds particular relevance for a candle business. Collection of data from surveys, focus groups, and market reports is essential. Subsequently, this data should be utilized to establish effective sales channels, encompassing both online and offline platforms, and to devise optimal distribution strategies.
At this point, make sure to cover these essential branding steps:
Choosing a business name: A powerful and unforgettable name is crucial. Invest time in coming up with a candle business name that reflects your products or brand purpose, and make sure it has the potential to evolve along with your brand.
Design a logo: Create a logo that you can proudly showcase on your product packaging, website, and marketing materials.
Create your labels: Collaborate with your designer to design labels for your candles that align with your brand's identity. Ensure compliance with the necessary candle label requirements and include important details such as the candle scent, product weight, and company information.
Step 03: Calculate your initial expenses and obtain financial support
When it comes to starting a business, you generally need to be aware of two types of initial expenses:
Costs related to production and manufacturing: These encompass expenses associated with producing and packaging your goods. Consider items such as containers, waxes, wicks, fragrance oils, thermometers, and other necessary equipment.
Business operating expenses: These include costs like software subscriptions, shipping fees, small business insurance, and other financial commitments essential for keeping your business operations running smoothly.
For example, you will have to allocate funds for marketing or advertising related to your products. Additionally, you must consider taxes, as well as ongoing expenses for website software or partnerships (such as 3PLs) to enhance and streamline your operations.
When it comes to raising funds for your business, there are various alternatives to explore.
Bootstrapping: is when you depend on your own personal savings or financial support from family and friends. It is a beneficial method to finance your candle business without the pressure of loan and interest payments. Nonetheless, it can also become.
Small business loans can typically be obtained from the SBA or your bank, with varying terms and interest rates depending on the type of loan.
Crowdfunding: Another low-risk method to finance a new candle business is by raising funds online through public crowdfunding campaigns.
04. Create a business plan
Creating a business plan enables you to strategically organize all elements of your business and establish a foundation for long-term development.
When creating your strategy, it is crucial to carefully analyze the different opportunities and challenges that your business is facing. Identify your competitors, your unique selling points, your distribution channels, and the resources you have available, among other factors.
05. Establish your candle business officially
Now is the moment to formalize your business as a legitimate business entity and address other crucial business tasks. No need to fret - this process is much less intimidating than it may seem.
Sign up with your state
Considering your place of residence is crucial. The process of learning how to establish a business in Massachusetts differs significantly from learning how to set up a business in California, for instance. Registering your business name should be done through your state and local authorities. The simplest way to locate the registration process is by searching for "register a business in [insert your state]" on Google.
The search results will display various links to companies that offer business registration services (for a fee). Nevertheless, you can bypass the service charge by directly registering through your state's official website. Typically, you will be required to pay a small filing fee, the amount of which varies depending on the state.
Obtain a federal tax identification number
Apply for a Federal Tax ID (or EIN) number, which is essential for opening a business bank account, securing a business loan, hiring employees, and other purposes. Luckily, the application is complimentary and can be completed in just a few minutes.
Submit applications for business licenses and permits
After obtaining your EIN, the next crucial step is to apply for a business license, which encompasses your seller's permit and authorizes you to levy state sales tax on your transactions.
Conduct an online search to locate the relevant website for your state (e.g., search "register for a business license in [insert your state]"). Follow the application instructions provided by your state. It's important to note that some states mandate only a general business license, while others have additional local or county-specific prerequisites.
Obtain a business bank account
It is advisable to maintain a clear separation between your business income and expenses and your personal finances, especially for tax and bookkeeping purposes.
Business accounts offered by different banks or credit unions come with varying fees, transaction limits, and balance requirements. Therefore, it is recommended to research and compare options to find a suitable local or online banking institution.
Keep in mind that in order to open a business account, most financial institutions will request copies of your business formation documents, licenses/permits, and either your EIN or social security number, which were obtained during the registration of your business.
06. Create your candles
Begin by creating your initial product offerings for sale. Kick off with a selection of candle fragrances that align well with your business and objectives. Subsequently, introduce a new fragrance every few months and solicit feedback from your customers.
Keeping your customers engaged and enthusiastic about new fragrances or product lines can be achieved with this.
An effective way to begin is by introducing a few fragrances that cover various categories, like:
Floral
Woody
Fresh
Exotic
Citrusy
Fruity
Sweet
Spicy
As an illustration, Renee Candle Co. provides a variety of unique fragrances under the following themes: Unwind, Noir, Tropix, Spiced, Lush, and Cozy.
07. Make a decision on where to sell and set up your online store
It is now the moment to embark on the thrilling task of setting up a business website to collect orders for your candles.
Choosing a dependable eCommerce platform is essential at this point. An eCommerce website builder such as Wix's platform provides a variety of features and functionalities, such as integrated catalog management, inventory management, and marketing tools that will prove beneficial down the line.
08. Formulate your marketing plan
Having completed a significant amount of work so far, it is now the moment to develop an eCommerce marketing strategy and determine ways to promote your candle shop. Being a Wix seller, you have automatic access to resources for business email marketing, social media marketing, blogging, and additional tools.
Utilizing social media platforms is an effective strategy for initiating product promotion, emphasizing the importance of avoiding a scattergun approach. It is recommended to focus on engaging with a limited number of social channels rather than creating accounts indiscriminately. Additionally, experimenting with diverse content formats such as videos and livestreams is advised to gauge audience reactions.
Pro tip: When talking about your product online, avoid subjective buzzwords like “amazing” or “best.” Instead, focus on your purpose and your story, and aim to demonstrate how your products are superior.
Other marketing strategies that are worth experimenting with:
Develop a newsletter for regular customer engagement and product recommendations
Initiate a blog as part of a broader SEO strategy to attract organic traffic to your website
Implement ad campaigns for retargeting site visitors or reaching new audiences
Encourage customers to refer friends to your website by offering special incentives
Curate user-generated content and social proof for showcasing on your website
Organize contests and giveaways to generate interest in your products
Participate in craft shows or local events to showcase your products in person