How to Start a Candle Business

With an increase in demand for artisan products, starting a candle business from home is an increasingly popular small business idea.

Craft based enterprises are a great, flexible way to make money. The set up costs are low, and the businesses can be run from home.

If you’ve already taken up making candles as a hobby, or if you are interested in taking up a new craft, our guide will take you step by step through the business start up process.

How to Make Candles to Sell

Whether if you are already a very experienced candle maker, or a beginner – you will need to decide how you will make candles to sell.

The candle making process is relatively simple. However, there are still a few factors all would be candle business owners must take into account.

Courses for Beginners

Youtube is your friend when it comes to learning a skill for free in the comfort of your own home.

If you are a total beginner, it’s a great place to head to keep your business start up costs low and learn some skills from experienced makers.

Target Markets for Candles

Before starting to produce candles to sell, you need to consider your target market.

Try to get a sense of what products are selling well, and any market niches that could work well with the direction you’d like to take your candle business.

Look at Candles Sold in Your Local Area

Take a look at what is on the market locally by hitting local makers markets or art collectives.

Consider the packaging and quality. Also look at any unique features and benefits the creators have built into their products. Make a note of their pricing structure too. This will give you an idea of what local customers value, as well as valuable data for making your own business plan and setting those all important product margins.

Look at Etsy and Ebay

Do some research into makers on popular platforms such as Etsy and Ebay.  These platforms offer valuable insight into what other candle makers are selling.

The good thing about using Ebay and Etsy is that the product listings also display sales data. If you find a specialist candle maker on Ebay, you’ll be able to get an idea of their whole product range. On the individual listings, you will also be able to see how many they have sold.

Etsy does not have data on sales at a product level, but it does show how many sales a candle business has made overall.

Check Other Sellers Reviews

You can check reviews of candle sellers products on Ebay and Etsy, this will not only let you see what their customers loved, it will also give insight into complaints.

Seeing complaints customers had about other makers products might give you some ideas for opportunities in your product design or marketing.

Types of Candles to Make

Beginners and experienced makers alike will need to decide which type of candles they will make. Some of this will depend upon the target market you’ve identified for your products.

Different candles will need variations in production methods, and some have regulations around their production and sale.  It’s a good idea to decide what type of candles your business will sell, and then get into the nuts and bolts of learning the right methods to make them.

• Parrafin Wax – Cheap and simple to make, this type of wax is the traditional method for candle making.
• Soy Wax – A new and increasingly popular alternative to petrochemical based candles. From renewable sources, so these appeal to the eco friendly market. Clean burning, and longer lasting than paraffin wax.
• Scented Candles – scented candles are often created using essential oil blends, or other perfumed ingredients.
• Vegan Candles – Another growing market segment, vegan candles do not include beeswax and will make use of plant based waxes such as soy.
• Decorative Candles – Decorative candles are a whole different market. People will not usually burn these candles, but buy them for their pleasing aesthetics. As decorative items, and often works of art in their own right they can command a premium price.

How to Calculate Pricing & Profit Margins

Working out how to price your candles sounds complicated, but it’s very straightforward if you stay organised.

Make a list of all the items that are used making your candles and how much they cost. A spreadsheet with some auto sums will be useful. This will allow you to tweak your costs to see how it affects your profitability.

 This might include:-

• Candle Wax.
• Candle Wicks.
• Packaging.
• Scents or essential oils.

Don’t forget to include other costs such as card processing fees, or seller fees from Ebay and Etsy.

How Much Should You Charge for Candles?

To calculate your pricing, you need to know how much each candle will cost to make. After this, add on your desired profit margin. If you aren’t sure of this, try 25% to 30% and see how your numbers look.

Alternatively, If you’ve done some competitor research you may  have a sense of what price similar candles to yours is worth to your target market, use this figure and deduct your production costs from it.

This process will also help you see if the type of candle you wish to sell is going to be commercially viable for you.

What if the Numbers Don’t Stack Up?

If your cost of materials plus profit margin means your product is a lot more expensive than your competitors, you may need a rethink.

If this does happen, don’t give up. Consider if you are adding value with your candles that others aren’t. Perhaps customers would pay more for your innovation.

If you do need to bring costs down, use your calculations to identify areas you can trim down your production costs. This could be through a tweak to your design, or seeking alternate suppliers.

Legal Requirements for Selling Homemade Candles in the UK

There are no specific laws which directly legislate for the sale of homemade candles in the UK. However, there are some general legal requirements you should be aware of before you start out.

The sale of your candles will be governed by The General Product Safety Regulations 2005 .

The regulations are there to make sure the goods any retailer sells to the public are safe.

You can find valuable advice on how to make sure you’re compliant with UK safety regulations that will apply to the sale of candles within the following guides:-

• Legal requirements for selling candles – comprehensive guide from Craftovator with useful insight into safety and different product types you may wish to sell.
• Product safety advice for businesses – the UK Government’s guide to help you interpret the regulations.

Consider Insurance for Candle Makers

Specialist insurance for candle makers can save you financial loss and stress if things do go wrong. An insurance policy will protect you from the burden of costs in the event of a customer taking legal action against you.

Types of insurance you might wish to consider:-

• Public Liability Insurance – this protects you from claims made by members of the public.  This can include personal injuries, loss or damage to property, or death for an incident in your premises or in a public place that arose from your work. This type of insurance usually covers compensation claims and your legal fees.
• Product Liability / Crafters Insurance – These types of policy cover you for legal claims relating to your product. For example, if a customer claimed your candle had caused a fire in their home.
• Insurance for your Stock –If you are holding stock which has a high monetary value, don’t forget to make sure it has been properly covered by an insurance policy. A major stock loss could cause your business trading difficulties.
• Specialist Craft Stall Public Liability Insurance – if selling at markets and fairs is a regular part of your business marketing strategy, a policy to cover you at these events may be worth considering. Many craft fair organisers require public liability insurance to be held before attendance. There are short term policies available for one off events.

Registering as Self Employed in the UK

Once you are ready to start selling, you need to make sure you don’t kick off your new business by getting on the wrong side of HMRC.

This is not something you need to do immediately, but you must register as self employed with HMRC by October 5^th in your second year of trading.

Opening a Business Bank Account

There’s no legal requirement to open a separate business bank account when you are self employed. However, it’ll make your life so much easier if you keep your business and personal transactions separate.

At some point you will need to produce a tax return taking your candle making earnings into account. If you have a separate account for all the expenditure and income, your life will be so much easier. Banks such as Starling, Monzo, or Revolut are all convenient options to open a separate account.

Taking Card Payments

If you’re planning on attending makers markets and similar events to sell your candles, you might wish to look at taking card payments.

 The use of cash in everyday transactions has reduced from 50% in 2010 to 17% in 2020.

This means you should make sure you have the ability to take card payments if needed, so you never miss out on a sale.

There are some great, low cost options for taking card payments.  Sum Up is a popular choice with many UK small businesses. It has no monthly cost, or minimum transactions.  They have options that can be used in tandem with a smart phone, meaning you don’t need a till or sales system to use them.  

The transaction fees for this option are 1.69%

Don’t forget to include card processing fees in your profit margin calculations.

Promoting Your Candle Business

When you’re still in the early stages of your business, you’ll want to keep marketing spend to a minimum. There are several ways to start bringing in those sales at low or no cost.

Here’s our top ideas to start driving those first candle sales on a budget:-

Easy Marketing Tips

1. Set up a Facebook page for the business. There are paid options to create targeted ads for the local area, or boost post visibility. You can also hit all your local pages and shout about your amazing candles.
2. Use Instagram. Candles are very Insta friendly and can be a great way to build interest beyond your local area.
3. Sign up for local markets – Craft and farmers markets are hugely popular. Make sure you research all the events taking place within a reasonable travel distance from you. Find out how much a stall costs, and don’t forget to ask what sort of footfall the events get. That will give you an idea of what you’d need to sell to make the event worthwhile.
4. Investigate craft shops and gift stores – You may be able to find some small independent stores that will either buy your candles wholesale, or sell them for a commission.
5. Create a website  or have someone build it for you. There are some great low cost options to build a basic site using online tools. Even a basic site showcasing your candles can help drive those extra sales. 
6. Word of mouth. Make sure you tell everyone you know about your new venture.  Ask your friends, family, and neighbours to recommend your new products. Word of mouth costs nothing and can help get those first few sales. 
7. Register on Google Business. Create a Google Business listing, you can add images on there, and don’t forget to ask all your customers to give you good reviews. This helps with visibility.
8. Flyers and business cards. If you’re going to be out at a sales event, make sure you offer anyone showing interest in your candles a flyer or card. Make sure your flyers and cards have your socials and website address.
9. Run a competition to win a free candle. People love a good competition, this is a great way to get the word out when you first start your candle business. Asking people to like, share, and comment on Facebook is a great way to boost visibility.  

Get Out There and Start Your Candle Business

There’s a lot to do to get a new business selling candles up and running, but just break it down into small steps and you’ll soon have a new enterprise.

Whether it’s a full time business, or a side hustle to make money while on maternity leave, the effort will be well worth it.

Starting a craft business means you can make money on your own schedule. Good luck and get started today!

See also: Legal requirements to start a business uk – a look at business structure and compliance.