How To Price Your Candles For Your Candle Business
Learning how to correctly price your candles is one of the trickiest parts of starting your own candle business.
In this video Jeff Standley from Standley Handcrafted shares his top tactics on how to price your candles to ensure you're still making a profit. From factoring in labor expenses and marketing, to matching your pricing to your city's geographical makeup - Jeff shares his knowledge and expertise to guide you on your path!
First and foremost, pricing candles is something you want to take time to research. You want to make sure you are pricing candles the right way so that your business is staying competitive and you are still able to compete with the wholesale and private label markets. Also, you want to make sure you're still making profits, duh! It is SO important to note that free shipping, marketing campaigns, etc. are all going to come out of the profit margin of your candles, so it will also affect how quickly you are able to grow your business in the long-term as well.
How would one go about the costs? The simplest way to calculate this is to first find out what your base/initial price is. There are calculators out there that break this down, but to put it simply, you'd want to factor in metrics like how much wax costs per ounce, how many ounces of wax are you using, how much you are spending on shipping to get the supplies to your house or workplace, label costs, wick costs, and even electricity during production.
This base minimum cost should pertain to making either one candle or a single batch. With that found, you can now calculate how much you should make the candle cost for wholesale vs. retail. Typically, for wholesale price you are going to multiply the base cost by 2. For the retail cost, you are going to multiply this wholesale cost by 2 (or 4 times or more of your base cost).
Standley recommends that when you're starting out, it is a lot easier to get into retail, rather than wholesale. Once you get into the swing of things and are able to create more products and and order more supplies, you should move into wholesale.
Now, for labor costs, you don't want to just multiply by 50 if you are suddenly making 50 candles vs. 1. You are going to calculate your labor making one whole batch rather than 1 singular candle. For example, if it takes you 4 hours to make one or two candles, it should still be the same amount of time (and therefore labor costs) when you start making 50. The only thing changing is the scale of your products and better and more supplies you now have.
Finally, it is important to note who your market is before you start to price your candles. Is it someone who cares about cheap candles, or someone that values high quality, or maybe both? You also need to look at the area you are in and even any other small businesses in your vicinity. You don't want to sell a candle for a price that is going to drive your customers to another shop, especially if there is one in the area that is more in line with their budget.
Know who your competition is as well as where your opportunity is and stick to your niche!