How To Start A Candle Shop In 8 Steps
While the market might seem saturated, the candle business is booming. Find your niche and get selling with these tips.
If you’ve been dreaming of how to start your own candle business, this might be the perfect time to carve out a piece of the market.
The candle industry is projected to reach $5 billion by 2026, and 70% of households purport to use candles in both decorative and practical functions. If you are crafty and have a nose for fun scents, read on to learn how to start a candle business, from how much it costs, the steps to get started, and our recommendations for selling online.
Table of Contents
- How Much Does It Cost To Start A Candle Business?
- How To Start A Candle Business in 8 Steps
- Step 1: Write A Business Plan
- Step 2: Register Your Business
- Step 3: Get Any Necessary Business Licenses Or Permits
- Step 4: Look Into Business Insurance
- General Liability
- Product Liability
- Commercial Property
- Workers' Compensation
- Step 5: Secure Funding
- Step 6: Brainstorm Your First Lineup Of Scent Ideas
- Step 7: Test The Waters With Your Product
- Step 8: Set Up An Online Store
- The Importance Of Creating A Unique, Identifiable Brand For Your Candle Business
- Funding Your Candle Business
- The Best Platforms To Start Selling Online With Your Candle Business
- Are You Ready To Start Your Candle Business?
- Candle Business FAQs
How Much Does It Cost To Start A Candle Business?
Thankfully, starting a candle business out of your home and acquiring online sales may be inexpensive to set up and maintain.
A small-scale, home-based candle business could cost as little as $1,000 in start-up costs. However, average start-up costs for a candle business run anywhere from $27,000 to $44,000. The upper end of that price point includes a potential building rental and brand-new equipment.
What You’ll Need To Get Started
You won’t be able to make candles without a few things. Here are some of the tools and materials you’re going to need:
- Candle wax
- Paper, cotton, and/or wood wicks
- Jars, glasses, and other vessels for holding wax
- A high-capacity wax melter
- Pouring molds
- Funnels for wax pouring
- A label printer
- Fragrance oils
- Herbs and spices for more rustic, true-to-earth scents
The prices for these resources are typically low-cost and vary from vendor to vendor. Keep an eye on vendors that are at your price point (better yet: contact local wholesalers), and tally up your anticipated costs for your budget.
As far as wax goes, there are a few varieties available. The most common — and least expensive — is paraffin wax, which can be bought for around $7 a pound. Soy wax is a popular choice and gives a better bang for its buck with burning times, but the downside is that it’s expensive for makers. Other common types of wax you’ll see include coconut wax and beeswax.
Don’t let cost be the sole factor in your decision to purchase one wax over another. Say part of your branding is using vegan, all-natural materials; you’re going to want to use soy or even coconut wax instead and budget accordingly.
How To Start A Candle Business in 8 Steps
Let’s go over the steps you’ll need to take to set up your candle business and start making sales.
Step 1: Write A Business Plan
Traditionally, business plans span pages upon pages with in-depth market research and financial planning. This is great for businesses that are risky or have a complex business model. But for your purposes, a one-page business plan may be a good start.
A one-page business plan consolidates all the essentials you’ll need to address. Identify what makes your candle business unique and gives it an edge over its competition, you’ll go over your:
- Business goals
- Target market
- Financial summary
- Marketing strategy
Your marketing strategy and target market will be especially important for your candle business.
Step 2: Register Your Business
Regardless of whether you’re selling online from home or on-site at a brick-and-mortar store, you’ll need to register your business
If you’re starting out as a sole proprietorship, you won’t need to jump through the hoops of applications and paperwork to have the government consider you a business entity. However, you should still register for a DBA to secure a trendy business name and to make your brand identifiable.
When it’s time to hire employees, you’ll need to get an EIN through the federal government. Even if you plan on sticking it out solo, having an EIN could make opening a business bank account easier and give you better access to startup resources.
Step 3: Get Any Necessary Business Licenses Or Permits
You’re going to need a business license at the very least to remain in compliance with the local government whose jurisdiction you operate or sell products in. Even if you decide to sell online only, it’s still a requirement. Failure to comply can lead to fines or a shutdown of your business.
Your sales count as taxable income, so you’ll need a seller’s permit issued by your state’s Department of Revenue, too.
Besides that, candle businesses generally don’t require licenses or permits. With that said, though, do your due diligence to ensure that you aren’t lacking any you may need for your business operations.
Step 4: Look Into Business Insurance
It’s an unfortunate fact that mistakes can and do happen in the world of business. Purchasing business insurance from one of the best small business insurance companies available is an important component of risk management. Though candles are generally low-risk, you may benefit from the peace of mind that business insurance can provide.
Business insurance will be especially helpful — and in some cases necessary — if you run a physical storefront and have employees.
Step 5: Secure Funding
Once you’ve got everything set up, it’s time to start investing in materials for candles, equipment, and anything else you’ll need to open up shop. See our list below for more specific funding options.
Step 6: Brainstorm Your First Lineup Of Scent Ideas
The four basic categories of scents can be divvied into fresh, woody, floral, and exotic. (Scientists also add pungent and decayed onto the list, but unless you’re selling candles to zombies…that may not be very tempting.) To keep things simple, focus on four to six candles that strictly emphasize a category or playfully combine compatible scents to start out.
Knowing your target audience helps immensely. While it usually isn’t a good idea to have a lineup of scents consisting of only one category — say, “fresh” with an abundance of fruit-scented candles — you may find after researching that prioritizing some scents over others may be what you need to grab the interest of your first customers.
Step 7: Test The Waters With Your Product
You won’t know what works and what doesn’t if you don’t give others a chance to try out your candles for themselves.
One way to do this is to sell at a farmer’s market and similar sorts of local markets. This allows you to interact with potential customers, see how they receive your candles, and gather feedback on scents and product presentation. It’s also a great way to establish brand awareness and connect with the local community.
Using an online storefront to test the reception of new products is also a great option since this doesn’t require investing a great deal of money. Start with small batches and adjust the stock to scale based on demand.
Step 8: Set Up An Online Store
It comes as no surprise that candle businesses can increase their revenue and reach by selling online. With an online store, you’re no longer limited to a local area or physical storefront — customers can place orders wherever and whenever they’d like. This can lead to increased sales and more knowledge of your brand.
Another notable benefit of having an online store is that it can provide valuable insights into customer behavior, which you can use to improve your marketing efforts and deliver even better candle ideas to those who want them.
The Importance Of Creating A Unique, Identifiable Brand For Your Candle Business
Part of the excitement with a creative venture like this is the wow factor that comes with showing customers your idea to fruition. It’s imperative that what you offer to your customers is unique and memorable. Why should someone invest in your small business? Generic and boring isn’t going to make it in this business.
If a potential customer doesn’t look at your candles and say, “I know I don’t need it…but I need it,” then you’re going to be left in the dust by your competitors who are leveraging their creativity to make wicked profits. Don’t hold yourself back! Think of that niche and lean in.
That being said, what are specific actions you can take to set yourself apart? Here are some ideas:
Look To Your Competitors For Inspiration
While this may not make…scents…at first (ba-dum-tish), there’s a ton of great information you can glean by researching your competitors. How are they grabbing customers’ attention with website design and product descriptions? What are their sources of inspiration? Market research is the foundation for any small business plan. What can your small business do better? Are you funnier? Are your candles targeted to a certain community? What is absent from the market — how can you fill a void?
Obviously, you should never copy what your competitors are doing. Don’t steal their ideas. But don’t think there’s nothing you can learn from them, either, and then go do better.
Know Your Story And Own It
Just as you have your own personality and voice, so does your candle business. Dial up the human elements of your business to your advantage.
Would you rather be sold a candle by a cut-and-dry robot, or by someone who’s eager to share the fruits of their creative endeavors, able to describe the myriad and harmony of olfactory sensations that each candle was designed to illicit? The answer is easy. Be authentic and tell your small business story.
Come Up With A Catchy Business Name
This part is important, too. Do your best to think up an available business name that captures the gist of your brand and makes it memorable to your fellow candle lovers. Your business name should be easy to remember, original, and tell consumers what you sell right away.
Find Your Niche And Focus On It
It’s a well-known principle in marketing that people don’t buy products — they buy stories. Your experiences and interests are invaluable assets precisely because they’re the means to build connections with people who already know and love the same stories as you. Stories that you are better prepared to express through your products than you may think.
Are you a lifelong fan of Star Trek, for example? Maybe you have a cutting-edge science fiction-themed candle lineup hanging out in the confines of your mind. Are you super into astrology? Perhaps you know how to capture the fragrance of a Pisces, Virgo, or Aries with the right blends of oils and spices. How about some margarita or mai tai candles, anyone?
The language you use, your target audience, and your product offering all go hand in hand.
Funding Your Candle Business
You might have the means to fund your candle small business independently, but there are many reasons why a small business might acquire funding. Wholesale prices can come down if you buy in bulk or maybe you want to fund and scale a successful advertising campaign.
This is why it’s important to be aware of the different sources of funding available for businesses. Let’s go over a few that may be a good fit for you.
Business Line Of Credit
Similar to a credit card, a business line of credit gives you access to a preset amount of funds upon approval by a lender. One of the advantages it has over credit cards is that they usually have higher limits and lower interest rates. Plus, with a revolving line of credit, you can access the funds you withdrew once again after you’ve paid off the debt.
If you’re concerned your credit might be an issue, don’t worry just yet — it’s possible to get a business line of credit with bad credit. You can get a line of credit from the SBA, too.
Using a personal loan for business could be a solid choice for those who are just starting out. It usually has lower limits than a business line of credit, but this may not be an issue if you’re keeping your startup budget low. However, do be aware that you’re personally liable if you can’t repay what you owe — not your business.
If this is an option that interests you, then be sure to check out our guide on the best personal loans for business.
Business Credit Card
Business credit cards work similarly to personal credit cards, the upshot being that they can be used to build up business credit. They can also easier to obtain than other sources of funding.
The best business credit cards currently available offer neat incentives such as welcome bonuses, cash back, and travel points. You can get a business credit card with just an EIN, and there are business credit cards you can get with bad credit as well.
If you have your sights set on large quantities of production, you’ll need the means to finance your purchases. Just as an example, a candle production line will cost you upwards of $200,000. And an industrial-grade, high-capacity wax melting tank rings up to around $8,000.
Equipment loans exist to assist you with getting access to the equipment you need to get your operations up and running. In some cases, it’s possible to lease equipment directly from a vendor for a monthly fee with the option to purchase it at the end of the term.
The Best Platforms To Start Selling Online With Your Candle Business
Plenty of easy-to-use tools exist today that make setting up an online store a breeze. Here are some recommendations to help get you started.
Shopify certainly deserves its position on this list. Setting up your website through Shopify requires no coding knowledge on your part. And Shopify’s marketing tools can help you get the most out of your online outreach by integrating with social media and other online storefronts, such as Amazon and Etsy.
Shopify offers tons of different integrations and loyalty programs you can use to keep customers in your sales funnel. Plus, if you set up a physical store, Shopify’s POS will handle payment processing and integrate with your online store.
Like Shopify, Square Online offers an easy-to-navigate website builder and payment processing system that can also pair with a physical POS. It also boasts dozens of integrations, including Instagram, Facebook, and Pinterest. This is a solid choice for small business owners that plan on opening a physical storefront in addition to managing an online store.
It’s possible to use Square completely for free. However, you’ll only get 500 MB of storage, you must use Square’s payment processor, and you’ll have to deal with Square’s ads on your website.
Helcim offers an online store builder with free web hosting. And in addition to its ability to receive international payments — a huge plus if you plan on selling worldwide — its interchange-plus pricing plan helps keep transaction fees transparent and your product prices competitive.
Etsy is an option to consider if building and maintaining your own website is a chore you’d rather not deal with. Setting up your store on the Etsy marketplace is straightforward, and its huge pool of customers could take a good deal of customer-hunting out of the equation. Should you decide to move online traffic over to your own website, Etsy Pattern allows you to synchronize your online stores for $15 a month.
Etsy’s single largest drawback is the enormous amount of seller fees it charges shop owners. Couple that with the fact that they can up those rates at any time and even close down your account without warning, and you may want to start searching for one of the best Etsy alternatives instead.
Are You Ready To Start Your Candle Business?
All businesses require a push in the right to start, and your candle business is no exception. We hope that these insights and recommendations prove useful to you. Don’t be afraid to be creative, leverage startup funding sources if and when you need them, and definitely weigh the pros and cons of the different online options you have.
Best of luck with your venture!