What You Need to Know BEFORE Making Candles to Sell

What You Need to Know BEFORE Making Candles to Sell

 

I am not a lawyer, insurance agent, or a CPA, but owning a candle business teaches you a few things along the way.

BEFORE making candles to sell, you are manufacturing a product that is intended to burn in someone’s home. You are responsible as a manufacturer to know and understand all (city, state) legal requirements for that process and releasing that product to the public.  There is a responsibility to the public even with crafts we enjoy and at the smallest level.

Do not be frightened. Selling candles to the public, friends, or family, requires a well thought out plan. This article is intended to help you succeed if a candle business is your goal. You should always consult with your local professionals. Often, we get lost in the creative fun with crafts and overlook all the not so fun things that can happen. Let us look at the process of planning to start a candle making business.

Before I wrote this, I checked the internet to do some research and was horrified by what I found. My first advice is DO NOT TRUST everything you read from a google search. So much of the information I found was inaccurate at the least and hazardous at worst. Not all was bad, but enough to be alarming. I cannot stress this enough.

 

Legal requirements for selling homemade candles

 

  • Do you need a business license to sell candles? Any retail space you rent will require a business license. Some local cities require a business license or a permit to sell at a flea market or vendor show. Check with your city clerk’s office. Additionally, ask the organizer you have a sign up with if you are doing a show.

 

Often, small crafters or small side candle businesses are covered under the building or show’s license. Ask for a set of rules or guidelines for doing business with them. I rented a table area at a flea market and part of the rules were “NO Open Flames”.

 

I have also rented a small space inside a marketplace that did require a business license. Part of that required a city inspection from a code officer and the Fire Marshall. Always check with your city.

 

Making candles at home and selling online typically does not require a business license. Selling candles from your home can be in a grey area. Most of the time traffic to your home for a business falls into the yard sale area. My city only allows me to do this twice a year and requires a permit that is good for seven days. Not following the city ordinance could land you with a hefty fine.

 

  • Do you need insurance to sell candles? I have to say this first. Insurance companies are your friend until you make a claim. Most homeowners’ insurance cover mishaps around the house because of personal hobbies. Make sure you check your policy for coverage. You may not be covered under your insurance making candles to sell from your home.

As a small business, it is important to protect your investment. Most homeowner’s insurance will cover the structure but not the contents or equipment. The time to make sure you are covered is before you need it!

Insurance policies are also meant to protect you in the event a product causes damage to the consumer. This leads us to the next question.

  • Do you need an LLC for a candle business? Forming an LLC defines the ownership of a business and what roles you or partners or employees play. I registered an LLC to separate my personal assets from my business assets (and liabilities). This area can be tricky so consult a professional. In Michigan, I was able to file online for $50.

 

  • What are the legal requirements for selling candles? This is the most overlooked aspect of crafting businesses. Laws vary by country, state, and city. As much as I would like to be your one-stop-shop for answers, check with reputable sources like candle.org and the U.S Consumer Safety Commission.

 

Some of the basics are labeling requirements under the fair labeling and packaging act. Also, the safety of consumer products by addressing “unreasonable risks” of injury (through coordinating recalls, evaluating products that are the subject of consumer complaints or industry reports, etc.); developing uniform safety standards, etc. I found these through the FDA.gov site.

 

In some countries, candles cannot look like food (Europe). Make sure you know what you can do.

 

Insurance companies may not pay off if you do not follow the best manufacturing processes and created a defective or hazardous product.

 

You will never look at a candle the same way again!

 

How to start a candle making business at home

 

You need a plan. It is so cliché and not the glam side of crafts but write down what it is you want from this adventure and what it looks like. Everyone enters a small business with a skill set at different levels. Starting a candle business when you have never made a candle before can be very expensive. Following a plan can help you succeed. With a plan, anyone can start a candle business with little cost.

  • How much does it cost to start a candle business? Let’s reverse engineer this. How much do you want to make? I have probably said this a hundred times to people asking this question.
    1. Candle making equipment and supplies
    2. Minimum Example (purchased in small quantities, does not include labor)                            $179
    3. Candle molds or containers start at on average $10
    4. Candle Wax comes in 10-pound bags on average $21
    5. Candle Wicks comes in a bag of 100 on average $10
    6. Pot to boil water and a pouring pitcher to melt wax on average $12
    7. Fragrance Oil as 10% of wax on average (10#) 5 variety of 4-ounce bottles $50
    8. Scale $20
    9. Thermometer $6
    10. Misc (labels, glue, paper towel, spoons, etc.) $50

 

 

  • How much money do you make selling candles? You can only make as much money as you have a product to sell. There is a distinction between what you spend and what you earn. “Treat it like a hobby and it will cost you like a hobby. Treat it like a business and it will pay you like a business.” For your business to grow, the profits must be put back into the business. I pay myself 30% (or less) of the profits and the rest goes back into the business.

 

  • Research and Testing The example above is based on someone who has never made candles before. If you have never made candles from scratch, then you need to do some pre-launch activities. This includes testing to make sure you have paired the correct wick with the containers you plan to use as an example. Not all fragrances are created equal. Not all wax is the same. Combinations of wax and fragrances respond differently. Candle making is not any different than launching any other product. You need to develop your skills, learn what works, and practice best manufacturing processes.

 

  • Can a candle making business can be profitable? Start small and keep growing. Stick with your plan. Selling candles at markets is different than selling candles as a side business renting a retail space. As your business grows so does the need for bigger and better equipment, supplies, and the need for added labor. Going into debt to launch will take planning a timeline before the business turns an actual profit. You get to decide what phase or scale is comfortable for you.

 

Types of candle businesses

Sell candles online from home (sell to family, friends)

Sell candles at weekend markets (craft and vendor show)

Sell candles as a side business (part-time or full time, in retail space)

Sell candles wholesale (bigger production runs)

Sell candles as a private label (manufacturing for someone else)

Sell candles and then have a candle business for sale

 

  • What is a marketing strategy for candle business? Part of starting small and selling to friends and family is the word of mouth advertising. Get feedback from your customers to improve your product. One of the benefits of selling at craft and vendor shows is the marketing. People love to smell candles, and this gives them a hands-on opportunity. Make sure to give them something like a candle care card with re-order information on it to an online store. You want people to find you later when they want more candles.

 

As your business grows so will your marketing and advertising needs. In the beginning, your biggest asset is craft shows.