How to Start a Candle Business: A Step-by-Step Guide With Tips and Insights (2022)

photo of a candle

Are you planning to start a business?

Consider starting a candle business.

Most people are surprised to discover that candles are one of the most lucrative industries in the world. A recent study found that the candle industry was valued at $7.15 billion in 2020 and is projected to reach $13.38 billion by 2028.

That’s 13.38 billion reasons to start your candle business now. Here are other helpful facts to help you understand the opportunity in the candle industry:

Around 35% of candle sales occur during the Christmas/Holiday season. And about 65% of candle sales are non-seasonal.

  • The retail price for a candle ranges from $1.99 for a votive to $35 for a large pillar or jar. Premium and luxury candles can cost $200 or more.
  • According to the National Candle Association (NCA), buyers view candles as appropriate gifts for holidays (76%), housewarmings (74%), hostess/dinner party gifts (66%), thank you’s (61%), and adult birthdays (58%).
  • The NCA also found that consumers in the U.S. use candles within a week of purchasing them and that the U.S. market offers more than 10,000 different candle scents.
  • A study by Global Industry Analysts found that the global market for scented candles is at an estimated US$354.1 Million in 2020 and is projected to reach US$542.4 Million in 2026.
  • Container and jar candles are currently the most popular types of candles in the U.S. market.
  • Over the next few years, soy wax will become increasingly popular due to its low carbon footprint, slow-burning, and long-lasting fragrance.
    The candle industry is a growing and incredibly lucrative one. It’s a market that has a steady and large following.

To help you get started, we created this comprehensive guide filled with insights and practical tips to help you learn more about the candle industry and the step-by-step process of starting your own candle business.

1. Identify your niche

Although the candle industry may seem saturated, there are still many opportunities for new business owners.

All it takes is brand differentiation, which entails finding and defining your niche in this billion-dollar industry.

To do that, you must determine the following factors:

Your target audience

Your target market is the audience you aim to reach with your marketing efforts. These people are most likely to become customers and buy from you.

When determining your target audience, consider the demographics of your intended market, such as their age, location, gender, and interests.

It is also essential to identify the various market categories to inform your branding, marketing strategy, platform, and pricing.

There are three significant categories of target markets in the candle industry:

  1. Prestige. The luxury candle market is a new and rapidly growing segment. A prestige candle can cost as little as $30 or as high as $200. Luxury candles are known for their premium packaging, fragrances, and emphasis on brand storytelling.
  2. Mid-market. Candles in this tier appeal to a broader audience. They will likely be found at retail outlets such as Macy’s or Target. Most mid-market candles come with natural scents like rose water, coconut, grapefruit, or basil and cost at least $10 apiece.
  3. Mass market. Mass market candles are among the lowest-priced in the market. Candles in this category come in classic scents like vanilla or ocean breeze and sell for $5 to $8. Most of this segment is dominated by brands like Yankee Candle and Bed Bath and Beyond.

Your target industry

Besides your target audience, you should also consider your target industry, especially if you plan on selling to businesses, such as spas, restaurants, and retail stores.

Candles have seen an increase in popularity in commercial spaces. They are used in spas, massage centers, and restaurants to achieve the warm and intimate ambiance for which these establishments are known.

Candle products are also gaining popularity, with independent brands, fashion houses, and beauty retailers as complementary products to their main product line.

Your type of candle 

Finally, you must consider what kind of candles you wish to sell and whether your DYI skills will help you make those types of candles. Narrow down your choices by asking the following:

  • Will you be selling decorative or traditional candles?
  • Are you selling luxury candles or affordable candles?
  • What type of material will you be using? Wax, soy, or vegan?
  • What unique skills do you have that can help you to differentiate your candles in the marketplace?

Choosing one or a few different candle types can help you perfect your craft and define your niche.

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2. Create your business plan

The key to success in business is to create a comprehensive business plan. A business plan is a written document that serves as a roadmap of how you will run and operate a profitable business.

An effective business plan should highlight sections that will help you keep your business on track and show potential investors or lenders your value.

By creating a business plan, you’ll also be able to streamline the process of growing your candle business and explain how it will succeed.

Here are some of the critical elements you need to feature in your business plan:

Business name

Your business name should be memorable while also accurately describing the kind of business you operate.

It’s also important to double-check that your chosen business name is available before moving forward. You can verify your desired business name’s availability on your secretary of state’s website to see if it’s already in use.

Once you’ve confirmed that your chosen business name is free and clear, take extra effort to reserve your domain name and social media handles before someone else ends up using them.

Business structure or entity

A business plan will also help you decide what legal business structure you want.

Sole proprietorship, general partnership, limited liability company (LLC), and corporation are some of the most common forms of business entities.

Choosing the correct business entity is a significant decision, and it’s not a decision that should be rushed. Your business structure will affect your taxes, risk level, and many other things.

Sourcing for raw materials and supplies

When starting, you may need to go to your local craft store to get wax and scents for supplies. You don’t need to worry about scale – you need to start.

However, if you plan to scale the business, you need to anticipate the changes you would have to make when your business grows. For example, you need to understand that buying bulk stock from a wholesaler will save you more money in the long run as your business scales.

So even at this point in your journey, you should already begin sourcing options for affordable supplies, so you can test for quality and eventually find the right supplier.

Here are candle-making supplies you might need when starting your candle business:

  • Wicks
  • Wax (gel, soy, beeswax, paraffin)
  • Containers for candles
  • Essential oils and fragrances
  • Coloring agents
  • Packaging supplies
  • Shipping service providers

Define your products and services

The products or services your business will offer must be clearly defined. Ask:

  • Will you sell scent-based products?
  • How much will you be pricing them?
  • How will you obtain the supplies you will need for your candles?
  • What will the cost be for these supplies?
  • What is the cost of production?

A business plan is there to guide your entire operation. It allows you to define your strategy, identify challenges, determine the resources you need, and evaluate your business concept before launching.

3. Make candles

Finally, we get to the fun part! The product development stage is where your creativity, ingenuity, and craft get to shine.

And creating a high-quality product is crucial because when the candle is good, it can help a person relax, add a decorative flair, or set a mood for the room. A wrong candle, however, can be disastrous.

So before moving to the next step, take some time to learn how to make high-quality candles and develop your signature scents if you sell scented candles.

At the product development stage, you would need to pay attention to mastering a good burn time, perfecting the quality of your wax, and balancing the intensity of fragrances for scented products (the scent should neither be too faint that it is barely noticeable nor too strong that it can be obtrusive).

You can experiment with different fragrance oil blends and containers until you find the perfect match.

Here are some candle types that you can mull over as a basis for your product development:

Aromatherapy candles

This is a common candle variety. Candles with aromatherapy or scented candles offer customers varying scents for sprucing their homes.

Aromatherapy candles are marketed as offering specific benefits associated with particular scents. It is common for these candles to contain essential oils that promote physical or mental health. Lavender aromas, for instance, are often associated with sleep and relaxation.

Vegan candles

Consumers are becoming increasingly concerned about the materials businesses use when making their products. Some consumers don’t want candles that contain animal byproducts like beeswax. Vegan candles address this concern using alternative ingredients such as plant-based waxes, soy wax, and natural oils.

Soy candles

Soy candles are one of the most popular candle varieties today. They are made from a base that contains soybean wax. In contrast to regular oil- or paraffin candles, this wax is derived from soybeans.

One of its unique selling propositions is that soy candles burn cleanly and for extended periods in addition to being made from renewable resources.

Decorative candles

You will most likely find these candles in a homeware store. These candles are primarily made for aesthetic purposes. They are typically not scented or made with unique ingredients. They enhance the look of residential or commercial spaces.

4. Register your business

One of the critical milestones in starting a business is registering your company with your secretary of state or regional business authority. Several factors go into registering a business, including the type of business you have, the size of your business, and the state in which you live.

The U.S. Small Business Administration suggests that every new business requires a license or permit at the federal, state, and/or local levels. Moreover, note that some states require you to register your new business if the trade name under which it operates differs from its legal name. In most states, you can meet this requirement by registering a DBA (doing business as).

5. Get small business funding

Any business endeavor requires some startup spending, and a candle business is no exception.

The costs of supplies, marketing, production, insurance, legal counsel, and more will require capital.

How much does it cost to start a candle business?

According to SmallBizTrends, candle business startup costs typically “range from $9,500 to $78,000, with an average around $44,000.” Here’s how those expenses look when starting a candle business:

  • Production equipment – $500 to $5,000
  • Supplies (wax, molds, wicks) – $3,000
  • Insurance and legal fees – $500 to $3,500.
  • Permits and licenses for the business – $50 to $700.
  • Business software – $50 to $500.
  • Small business insurance – $500 to $2,000.

Few entrepreneurs and small business owners have enough savings to pay cash when starting a candle business. But there are plenty of business financing options. For example, consider:

Business credit cards

Business credit cards may be a good choice for new business owners because they require a lower credit history than a loan. Most credit cards offer a 0% interest rate during the introductory period, equivalent to having an interest-free loan if you pay off your balance before the introductory period expires.

Business lines of credit

The business line of credit is more flexible than a standard business loan, as you can only borrow as needed.

Startup funding

New business owners should consider startup financing options such as SBA microloans or business grants. In addition, crowdfunding is becoming increasingly popular as an option for funding startups.

6. Develop your branding

Effective branding ties your business idea, target audience, and products together. And in an industry, as saturated as the candle market, a unique and memorable brand identity is paramount.

A lackluster brand in this competitive market will not succeed.

That said, there is more to a brand than just a recognizable business name and company logo.

You can’t build a strong brand without consistency and the focus to extend that consistency throughout your business. To build a brand, you must establish what consistency looks like and what kind of feelings you want to evoke.

Here are fundamental elements you need to consider when developing branding for your candle business:

Brand Pillars

Branding is critical in establishing your reputation, attracting prospective audiences, and helping existing customers understand you better.

Thus understanding your brand pillars is essential to developing a strong brand.

Brand pillars serve as the foundation for your brand. These characteristics and values define your brand and set it apart from your competitors. Brand pillars have five aspects: purpose, positioning, personality, perception, and promotion.

And to build an even stronger brand, you should consider your brand archetypes. This will enable you to create a brand that audiences recognize, relate to, and even empathize with on a deeper level.

Finally, remember that how you tell your brand story matters. Strong brand stories create loyal customers who become zealous advocates for your brand.

Logo design

Brand identity begins with a strong logo. Having a well-designed logo is crucial to a successful brand experience.

And while it’s tempting to find a logo generator, this option will not help you differentiate your brand. It’ll cost you more in the long run because poor branding will weaken your brand.

Fonts and Color Palettes

The same consistency should be followed when selecting fonts and color palettes for your brand identity.

Consider using only one or two distinct typefaces across your product designs, website pages, social media accounts, and marketing collaterals whenever possible.

When it comes to color, stick to a similar principle by choosing three to five colors to create your brand palette.

Identify your primary and secondary brand colors early on and use them appropriately. You can also look into color psychology to help inform you of the various cultural and societal meanings colors convey in branding.

7. Refine your marketing strategy

You can begin marketing your company by choosing a business name and developing your brand.

A well-thought-out marketing strategy is crucial to getting your products in front of your target audience.

Social media is an excellent place to begin, which is free, easy to use, and fun.

Email marketing is also an affordable option that you should also consider.

8. Select how and where you sell candles

Like many other business-to-consumer products, one of the most lucrative ways to sell candles is online. Multiple digital platforms, such as social media and your e-commerce site, can help you reach potential customers worldwide.

There will be different digital platforms for different merchants, but here are a few places new candle business owners can start.

Instagram

Instagram has helped many lifestyle brands build a sizable following.

Market on Instagram by curating a feed of images that showcase the best of your products and your brand. Share scroll-stopping photos of your candles to attract customers.

You may also use Instagram to engage brand ambassadors and influencers who can use their following to amplify your reach and provide social proof.

Pinterest

Pinterest is one of the largest platforms people use to discover brands and products.

Home decor is a significant category on Instagram, making Pinterest a great marketing tool to promote your candle line.

Invest in building a portfolio of stylized and professionally-shot product images. And if you can, also add lifestyle images featuring your products. It lends your brand an aspirational quality that catches the attention of many in your target audience.

Tiktok

Tiktok is a popular social media platform that has gained massive global popularity recently, raking over 1 billion monthly users.

This is another highly visual platform where creative video content is the common denominator.

When marketing on Tiktik, help people to get to know the brand more intimately. You can feature behind-the-scenes edits, unboxings, customer testimonials, and product drops.

You now have a roadmap to get started with your candle business. Good luck!

We regularly update this how to start a candle business guide. We most recently updated this guide on September 6, 2022.

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