Real Candle Business Startup Costs, Profit Timelines, and COGS Explained

#021 We answer real candle business questions from startup costs and profitability timelines to wicks, seasonal strategy, scaling beyond the kitchen, and cutting COGS, using hard numbers and simple steps. We share exactly what worked for us as we grew from $1.5k invested to $1.5M in sales.

• startup budget realities and lean inventory planning
• niching down, target customer clarity, and faster testing
• when to move from home to warehouse or retail
• retail vs wholesale vs private label trade-offs
• wick selection using supplier recommendations
• seasonal collections vs evergreen fragrance strategy
• lowering COGS with smart shipping and standard vessels
• sales channels that convert: email, wholesale, fundraisers
• why defining your why sustains momentum

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Transcript

Questions From Candle Makers

SPEAKER_00 0:01

In today's episode, I'm answering Candle Business questions from viewers and listeners just like yourself. When you join our Candle Business Pro free Facebook group, you are offered a chance to submit a question. And if you do submit a question, I will answer those for you in an upcoming episode. So let's dive into the most recent submitted questions. If you're just tuning in for the first time, I'm Sebastian Garznet, the co-founder of Garznet Beacon Candle Company, alongside my husband Chad and the founder of Candle Business Pro, where we help makers go pro. We have everything from supply list to a candle making course to our inner circle, which is where candle business owners come together as a community and help each other grow and scale our businesses. So if you want to learn more, you can check out Candle BusinessPro.com or visit the show notes below for some free links to different downloads that you can grab from us. All right, so let's get into this. This first question is from Katerina. Uh, I will definitely mess your last name up, Katarina, and I do apologize in advance for that. Um, but I'm gonna go with Katerina Polenskeya. Paulinskea, Katarina, all right, let's talk about this. Your question, as a solo candlemaker, starting with limited resources, how long would it realistically take to reach profitability? And what would you recommend doing to get there faster? Okay, so great question. So it's going to cost um a bit of capital for you to invest into starting your business, right? You're gonna have to go through all the testing. You're going to have to go through figuring out what wax you want to use, what wicks, what oils, the vessels, gathering all of those supplies. I have a video that we recently did, um, and it is all about the cost of starting up, what it realistically costs to start your candle business. So I would definitely recommend checking that out. There might be some costs affiliated that you might not realize when you're first starting. So definitely check that out. Realistically, for us, uh$1,200 to$1,500 is what it took to go through all of the different testing, uh, creating some initial um inventory or to turn around and start selling. And then once we started selling those candles, we just turn around and put that right back into the business. But that's what we started with. That is what we got this business off the ground with. And we have grown to now in the last three and a half years, um, we just surpassed$1.5 million in sales. It's definitely doable. It will be a slow start, um, but you it's not a matter of needing unlimited resources. It's more of a matter of really focusing on the candles you want to make. I often will see candle makers say that it took them$5,000 plus to get started. Usually, not all, but usually, that is they have tried multiple different waxes, multiple different wicks. They've tested hundreds upon hundreds of different combinations. They invested a lot of money into uh potentially their branding. They may have pivoted a couple times. You do not need to invest that much if you really know uh the direction you want to go. What I would recommend doing would be to think of those brands that you you really um admire. Uh they can be small, they can be large. It doesn't matter the scale, just find something that really aligns with the type of candles you want to make. You need to have your niche and your target audience completely dialed in. I do a lot of talk about that in many of these episodes. You have to understand who you're making candles for and what niche you want to be in. But once you have that, it comes down to actually making and learning uh the candle testing side, right? To understand how to make the right candles. Um, and that's where a lot of expense comes in. But if you have some candle brands that you really like and appreciate that you would like to draw inspiration from, take a look at what they have, take a look at how they started out. Uh, even reach out to some of them. If they're if they're a small uh business, they they might be very willing to share some of their knowledge. See, you know, what wax are they using, what type of wicks are they using? And know if they are doing it, you can certainly do it as well, right? People ask us what wax do you use? Uh, I mean, I'll give that to you. We use 464 wax with CD Wicks, and then we use a coconut soy with performance wicks. So those are the two different waxes we use, and two different wicks based on whichever wax it is. Uh oils, doesn't matter, get them from any supplier that's reputable. Uh, you can grab our free supply list in the show notes below. It has all the tools and resources that we use uh to start and run our candle business with. Um, so hopefully that helps you out there. Keep it small. Don't try everything, don't try to be too wide. Also, when we started our brand, we started with 10 different cents. And then in all of those 10 cents, we made a lot of inventory when we first started. I would highly recommend scaling back even farther than that. I would start with six cents and I would maybe have five to ten candles made. You can make candles as you go. Once you sell something, make some more of it. Don't sit on supply that might not be something that people want to buy, and then you're just stuck with it because that's just money tied up in that. So hopefully that helps you out there, uh, Katarina. Uh, next question here is from Mike Wynn. And your question is what steps to take when your candle business outscales home candle making capacity? I love this. So, this is exactly what happened with us. We started right at our kitchen table, and then I went into the dining table and then um into part of the living room to where we had a table where we were like labeling stuff at night while we were still trying to have like family time, watch our shows, but we had we had stuff everywhere, right? It got to the point where I am working my 95 job, which I worked from home, and literally right next to my desk was all of our candle stuff. It got to a point where I couldn't handle both of that because then it was like I wasn't escaping work. So what we ended up doing was we took our primary bedroom and turned that into our candle making studio so that we could just close the door and turn off candles when we wanted to, because everything fit in that room, we could turn it off and not have to face it. Of course, we still smelled it, our neighbors smelled it because we had our windows open. Um, you can't always escape it. But when it was finally the time where we said, enough, we need to get this out of the house. That's when we opened up our storefront because we justified, hey, it's gonna cost a thousand dollars a month to get a warehouse, get a space uh to put all of our stuff in, right? And then we got to go there to make the candles and everything. And it's just gonna be a general warehouse, like a not a storage unit, but you know, it's just gonna be four walls, right? So we thought, let's just spend a little bit more than that uh and get a retail space. So let's just go all in. Let's just do it. Uh, it was perfect because I was working from home, I had my 95 job, so I could still support our our family, us, uh, as we needed to try this new venture. And Chad was able to go and open up the storefront. Uh the storefront cost us$1,700 a month. Uh no, no, it was$1,600.$1,700 now. It was$1,600 a month was our rent there. So it was$1,600 a month to open a storefront or about$1,000 a month to rent a space. So we just went on it. Um, of course, there's a lot more that goes into it besides just a$600 difference. We had to, you know, be sure that we could cover, you know, a salary in the family that wasn't going to be coming in necessarily anymore. Um, but we were comfortable with it. We are we had just started making candles. It happened, it happened really quick for us. We started our candle selling in February. We opened our storefront in August. In between there, we did markets and I really went into wholesale. That's what made me confident that we were going to be able to make it work was we had proof of product. We had proof of sales. People were enjoying our products. Okay, let's go ahead and open up a storefront. Um, and let's do it. It was close to home and it got the candles out of the house. So that's what we were we were comfortable with. And so the steps, your question is what steps to take when it outscales your home? It depends on what direction you want to go. Do you want a retail store? Some people don't want a retail store. If we were to start all over again, I might go harder into wholesale and private labeling than a retail store. A retail store is a lot of a commitment. You have to be open specific hours, you know, that you are setting. There's an expectation that you set as a retail store that it's not just a I open when I feel like it. That's usually not going to be how it works. Some people might be able to get away with that. We certainly can't. There will be times where we close an hour early. That's the time that someone decided they want to show up and they're calling us or they're leaving us a Google review because if we weren't open during our posted time. So it takes a lot on, but that's what we did. We we open up a retail store. If you have zero interest in that, then find you a nice temperature-controlled um place that you can do your candle making uh and also be packing up your orders and all of that from that space. Uh that's what that's what I would uh recommend trying. Next question here is from Bridget Williams. How do you choose a proper size wick? Uh, whether I'm using wooden or cotton. Okay, great question. Fair question there. Um, so every supplier of wax that you purchase from will have a recommended wick. Now, I often see candle makers try a wick and then they try another wick and they try another wick and they get frustrated and they they just keep going in this big circle. The reality that we have found, um, and also a lot of the members inside of our inner circle, when we have these conversations about wicking, generally the wick that a supplier is going to recommend for you is a good wick. So, candle science, they're going to recommend for their 464 Wax, they're going to recommend a CD WIC or an Eco Wick. Um, we tried both of those. We liked the CD Wick. It was good. We went with it. Uh, generally they're not going to recommend something that's not going to work because they want it to work, because then they want you to make candles, get rid of the candles, buy more supplies from them, right? So they're not just going to recommend something of that they carry unless it's going to work. And I and I found that with everything. Uh with Macy, they have their coconut soy wax and they have performance wicks that they recommend. When we started with that, we didn't think that the wicks were performing the same way that like a CD wick performs with the 464. So then we went on that circle of testing a whole bunch of different wicks. The reality is, is that that wax burns differently than soy. And so we ended up circling all the way back and using those wicks that were recommended. They were the right ones. So I would start with the the line of wicks that the supplier recommends for that wax. And then it's a matter of testing. And if this wax, if this wick doesn't work, you need to go up or you need to go down. And so then you got to understand what you're looking for when it comes to testing. But when it comes to just selecting wicks, I would just recommend uh starting with uh the with the wicks that the suppliers uh are recommending for the wax that you're buying from them. All right, so the next question here is from Sarah Orion. Sarah asks, I've been absorbing a lot of information recently and how to start my business, but I think one question specific to me is do I need to have seasonal collection of candles to succeed? I know that might seem weird, but I have a unique niche theme uh that I want to create candles for, and seasonal collections don't exactly fit in. You do not need to have any seasonal candles. In fact, our new without brand of candles that we are doing is more of a lifestyle brand for us. We are doing uh candles. We are also going to be having perfumes, and it's really not about having seasonal changeover, it's really going to be focusing on the brand itself and the scents that we're going to have are going to be year-round. And we will slowly add new products, but they're not necessarily going to be seasonal. We might eventually down the road, but at least for the next year or two, as we're growing this brand out, it's it's not going to have any type of seasonal. It's just not going to fit. The theme that we're going for with this, with the without brand, is the scent of the candle is also a perfume, right? And so doing a seasonal, I don't know how many people want to have a peppermint stick perfume or pumpkin spice perfume. Um, I mean, some people might love that, uh, but that's not what we are going to be going for. It just also wouldn't fit in with the vibe of that brand. So depending on what your niche is, you absolutely don't need to do that. Just think of some of the other things besides candles that are in the scent world, such as perfumes. These lines of perfumes that come out, some of these brands, such as like a Christian Dior, just as an example, they'll have several different perfumes, but they're not seasonal. Like they're not putting out a seasonal scent, right? Um, so you absolutely don't need to do that. Um, and a lot of times it won't, it won't fit in. If you're doing all to say bougie elevated hotel collection type of scents, like where would a fall or seasonal um scent fit into that? I'm not sure necessarily would. So, yeah, depending on what your niche is, it might be completely irrelevant to to do something seasonal. Um, so no, definitely not. Next question here is from Shannon Cag. And the question is, where should I begin? Great question. So the first thing I would do is uh define your why. Why do you want to make candles? Because that's what you're gonna need to refer back to quite often. Because candle making uh is not easy, right? Candle making can be learned and become very easy. But if you're wanting to make this into a business, it's gonna take a lot of work. Anybody can succeed, but you have to put in the work. And I think there's a misconception that uh because the entry level to get into this is so low that anyone can do it. Yes, anyone can get into it, but succeeding is a whole nother thing. So many people I see, and it's so unfortunate that uh they go through all of the steps of learning candle making, which it's that's its own beast. Now they've had a candle, now they are building a brand around it. Their packaging is right, their branding is right, um, their messaging is right, everything is good, but they aren't taking the steps to figure out what sales channel works best for them, and then they end up giving up and quitting. And I hate seeing that, but it happens all the time. In candle making, you are going to when you want to turn this into a business, you're gonna have to work really, really hard. I it it's it's it's it's tough because inside of the inner circle, we are a community of candle business owners, right? And we are all networking, sharing tips, sharing tricks. Um, we do a workshop every month, we have office hours every week. And people come together and often say it's hey, I'm struggling. What can I do to get what can I do to get started? One of the easiest things I always say is do a fundraiser. You can do a fundraiser and get your brand off the ground. Do a fundraiser. But some people just just don't do the steps. Whether it's just not them, they realize, hey, this is more than what I wanted to do, um, or that's not a uh a direction I wanted to go. Uh some people say I hate social media. I'm not gonna, I'm not gonna create a business page for my candle business. Can you make a candle business without social media? Sure, you can. Um, it's not going to make it any easier, though. It's going to make it harder, right? It's just like the the number one thing that I always say is make sure you collect email addresses starting on day one. Do you have to? No. Can you create a business without that? Sure. But though these are just things that are going to make it a lot easier for you because we've gone through it. Uh, we started collecting emails several months later than we should have, but that's better than several years later than we should have. Because now, anytime we need an influx of cash in the business, I send out an email and I do a promotion, and we will get sales that day that will pad our account if we need an influx of cash. And so, and trust me, we have done that in April around tax time. I'm like, eek, we got tax bills to pay. Oh, all right, cool. I know I can bring in X dollars by sending out emails and doing a promotion. I know it works with my customers now. So, where you should begin is realize it's gonna be hard. Uh, but if you're dedicated to it, then simply if you don't know how to make candles, I've got a great candle making course uh that myself and Chad uh host and put on. You can find out more about that at candle businesspro.com um slash course, I think. Um, but there's also some free resources out there. Our course is built around getting you from A to Z as quick as possible. We say 28 days, four weeks, you're gonna get through it, you're gonna test all kinds of stuff and you're going to have candles at the end of that. So that's the easy part. Uh, so when you see there's plenty of resources out on YouTube, uh, you can watch all kinds of videos. Just make sure that whoever you're gonna follow, uh you just trust. You trust in them. If someone is promoting that they can help you start a candle business, make sure they're running a candle business. Make sure they're actually selling candles, if in fact they are saying that, right? So it's the same thing just with candle making. Surround yourself with other people that are doing what you want to do. The the easiest way to learn anything I have found is to put myself in the room with people that are doing it. I if I wanted to uh learn how to make candles, I'm gonna put myself in in candle groups and just look around. And don't always act so fast. Don't always just as soon as someone says something, uh do what they say. Just, you know, pause for a minute, see who's who's surrounding you, and see, see really who who you trust and reach out to people. People reach out to us. In fact, the reason we started Candle Business Pro was people reaching out to us, and that's what ended up making us decide hey, let's actually turn this into something and turn this into a community where we can all get together. Um, but so where you should begin is just making sure you understand your why because there's gonna be a lot of hurdles and obstacles for you uh to cross on this journey so that you're gonna be able to reflect back on why you're doing it. Are you wanting um to do this as a family, to help your family, to bring in revenue? Are you wanting to quit that nine to five job? There's all of these different reasons and different whys. Make sure you have yours kind of honed in because you're going to face challenges that are gonna make you want to quit um multiple times. Uh, we're three years into this. I have three stores, I've got 150 wholesale accounts, we're doing fine, but we'll have days um that we will go without a sale. And I'm talking between three stores and our online store that we get sales in every single day, we will have a day with like zero or like one or two sales. So we're losing a lot of money, right? Because we have staff in all these stores. And I think to myself, I'm like, this is it. The candle business is over. We'll never get another sale. And then the next day, you know, usually bounces back. But you're gonna have those challenges in your face where you're just like, I don't know how I'm going to do this. But surround yourself with other people that are gonna lift you up. Next question here is from uh Patty Granitch. Hopefully I'm saying that correctly, Patty. Uh, when just starting out, how do you keep your cogs low enough um to price what your candles will sell? Because buying in bulk to get the lowest price doesn't make sense when first starting out, or is that the way to go? Great question, uh Patty. So, COGS, for those that may not know, uh cogs is your cost of goods, right? And so Patty wants to know how do I keep my cost of goods low without buying everything in bulk? The reality is that when we're first starting, no, you don't want to buy everything in bulk. There's certain things once you get through the testing that you are gonna feel more comfortable buying in bulk. Um, and that's gonna be like your wax. Wax, I say buy in bulk. Now it's it's not necessarily it is bulk. It's not like a wholesale price. They're not gonna give you much of a discount when you buy more. What you're gonna get a discount on is the shipping, especially with like for instance, we will use we use a couple of different suppliers. We used to use candle science exclusively, um, but now we are trying other suppliers that are local or closer to us, that shipping is a better price. But one of the things that Candle Science has is they have UPS hundredth weight, which is a class within UPS that once you get to a certain weight threshold, the calculation for shipping cost changes and it's it's pretty dramatic. We will get up to like$300 in shipping, and then it will just drop to like$150 and by adding more stuff. So what'll happen is Chad will build out a cart, and so he'll have, you know, a couple hundred vessels and all these oils and a couple boxes of wax, and we haven't hit that threshold yet to where the the shipping line says UPS hundredth weight, and I'll be like, add another box of wax, and then we'll put another box of wax in there. If that doesn't work, we add another box of wax, then you're gonna see it drop down dramatically. So the wax you can't necessarily, you know, you can't get a discount on even the oils and things. Like honestly, we are running, like I said, you know, we were doing over 500,000 a year, 550,000, I think is what we'll come into uh this year in sales. There's not a lot of stuff that we are getting like crazy discounted pricing on. We will get our vessels where we'll buy the next threshold of cases, right? Where it's like one to six cases is two dollars a piece. And starting at seven cases, it goes down to a dollar seventy-five. So that might that's only a quarter per vessel. But when you're buying a hundred vessels, that's$25. That's a way of saving money. Um, one of the ways of saving money actually is by if you're watching this video here, I'm showing you the our classic glass, right? So this is our classic line of candles. This is where we make our money. And this is a vessel that's really, I mean, it's just a glass vessel, right? We don't have a different colored vessels for our classic year-round candles because their colors and things like that of vessels are going to go in and out of stock, in and out of your supplier carrying them. So start with something that you can use for all of your candles, like a simple jar like this, and then make them different based on your labeling. That saved us a lot of money because then it's not a matter of, oh, for the sugar lemon scent, I have this yellow vessel, but then this candle doesn't sell, and I now I'm stuck sitting on these vessels, right? The reality is a lot of the suppliers, their vessel inventory changes over all the time. I would not build a new candle business around any of the suppliers' vessels that are fun, unique, um, special, you know, seasonal, because that's where you're gonna get stuck when they end up not carrying that anymore. It's happened to us on a couple of the lines that we carry from different suppliers. They, you know, they're only gonna carry what makes sense for them. You buy up these colored vessels and you have, you know, for instance, we have a coconut soy collection that we do in these like boxes back here. Um, even who we buy those boxes from, they they end up going, you know, out of stock all the time. So it's frustrating. So I would keep your supplies very basic, but your branding doesn't have to be basic. And everything you do around it, you know, we invest in our labeling um and it it works for us. And so uh keeping your other other cost of goods down, even our oils, we buy it, we still buy them by the pound. There's a few of our oils that we will buy by the five, uh well, we buy a lot of our oils in the five pounds now instead of one pound. But when you're first starting out, your costs are just gonna be high. Is this what it's going to be? This candle, when we first started, was about$7.25 to make. We make this now for about$5.50. Okay. So we're almost$2 cheaper now. But at$7.25, we sell this for$26. We're still making good money on it, right? It might not be quite that 4X,$5X,$6X that I would want to go for. Uh, I have lots of uh episodes about how we do our pricing. But when this was seven and a quarter and I'm selling it for$26, it was fine. As long as you're pricing, you you've got to be in a niche that will sustain what you're going to want to sell your candles at retail. Uh, you also want to make sure that you're going to be able to sustain if you're going to be doing that at wholesale as well. Uh, so just keep keep that in mind. As long as your margins are wide enough and know, hey, eventually I'm going to be able to get these down cheaper, but can I sustain it now? If I'm trying to sell this candle for$10 and you know it's costing me$750 to make, it's it's not going to be realistic. So you either need to change your product or you need to change your niche and who your target audience is going to be. If your target audience isn't pinning, is isn't spending more money or more than$10 for a candle, then you need to make a pivot there. The last question here today is from Talbot Robinson. Do I need to have a YouTube channel in order to be successful? Um, to sell candles? No. I wouldn't recommend a YouTube channel to sell candles. Now, I can see if you are in such a niche that you can build a following around a niche and then throw your candles in there. For instance, if you if your niche that you're in is farmhouse cottage, right? And you start a YouTube channel that's all about farmhouse cottage, then you could certainly throw your candles into the mix of that. But there would be so much time, effort, energy, and probably expense on just putting together a YouTube channel for that farmhouse cottage that um it might not justify what you would get by bringing your candles in a little bit. For instance, I had this whole channel, which is about growing candle businesses. Uh, it's not about selling my candles, and I don't think I've sold any candles from this channel. I'm not asking anyone to go and buy my my products. And I don't know anyone that is successful on their candle selling side because of a YouTube channel. Uh, what I would recommend is knowing where you where is your customer. Our customer is Facebook and Instagram. That's where our customer is. Some uh niches are going to uh rely heavier on, say, TikTok or more video based. That's not necessarily our customers. Um, who is your customer? Where do they hang out at? And that's where you want to spend all of your time, um, is where they are. And you don't have to you don't have to be everywhere. I'd love to be on TikTok, I'd love to be on Pinterest, I'd love to be in so many different areas with our brand, but there's a time uh commitment. And so I'm gonna focus on the top two places where my customers are going to be. But I'm I I'm personally not familiar with candle brands that are successful because of their YouTube channel. There's a lot of people that have YouTube channels in the candle making space. I mean, we are one of them, um, that teach people how to make candles and things like that on YouTube. And a lot of that is people that are wanting just to be, you know, they're they're YouTube, they're their marketers, right? And so they're they want clicks, they want likes, and they they are looking to monetize YouTube. Um that's completely fine. I mean, we actually we bring in a little bit of revenue when we do these episodes, but it doesn't cost the or it doesn't cover the cost of me hiring my editor to do these because I cannot do any video editing. Uh so just keep that in mind. You know, uh, I don't I don't think that you, I definitely don't you don't need a YouTube channel uh to be successful in a candle business. You just need to have social media, you need to have a website, and you need to be able to find a sales channel that's going to work for the niche that you want to be in. Uh whether that's direct to consumers, you want to do wholesale, you want to go down the fundraiser and private um private type of candling, you can do fundraisers themselves, you can do corporate gifting, you can do wholesale. There's so many different ways. Once you can make a good candle, there's so many different ways that you can sell it. So just keep that in mind. So many different ways that you can sell. But YouTube channel to sell my candles is not one that I I've considered. So uh no, I do not think that you need that. That is it for this episode. Thank you all so much for tuning in. Again, there are some resources for you in the show notes below. You can see our favorite tools and supplies that we use. You can actually download our checklist of all of the supplies that we use to run our business with. You can also give us more information about our courses and the inner circle, where I highly recommend anyone that wants to scale a business come and hang out. Again, you can submit questions in the show notes below or comment on this. And I will look in the comments for questions and I will answer those in an upcoming episode. Again, thank you so much for tuning in. Have a great day.