How to start a candle business: from idea to first sale

Starting a candle business is a rewarding venture that combines creativity and craftsmanship with business savvy. The global candle market is worth billions of dollars, with steady demand for products used in home decor, aromatherapy, and as thoughtful gifts.

This guide will take you through the practical steps of validating your business concept, obtaining necessary permits, acquiring equipment, and building supplier relationships to help you launch a successful candle business in the U.S.

Step 1: Plan your business and validate your concept

First, define your niche. Use Google Trends to compare search interest for different scents or candle types, like “soy candle” versus “beeswax candle.” Pinterest Trends can also show you popular aesthetics and color palettes that resonate with home decor buyers right now.

Next, analyze top-selling candle shops on platforms like Etsy. Pay close attention to their pricing, photography style, and product descriptions. Many new owners skip this, but it provides a clear picture of what successful brands do and what customers expect to see.

Estimate your startup costs

Initial costs for a small-batch operation typically range from $700 to $2,000. This covers basic supplies like wax, wicks, and fragrance oils ($200-$500) and equipment like a pouring pot and scale ($100-$300). Budgeting for these helps ensure a smooth launch.

You should also account for business formation fees ($50-$500) and product liability insurance. A frequent misstep is failing to accurately calculate the cost per candle. To avoid this, add up all material costs, a fraction for labor, and overhead to set a profitable price.

Here are 3 immediate steps to take:

• Use Google Trends to compare search volume for three potential signature scents.
• Analyze the pricing and shipping costs of five successful Etsy candle shops.
• Create a startup budget spreadsheet that lists all potential equipment and supply costs.

Step 2: Set up your legal structure and get licensed

You might want to consider forming a Limited Liability Company (LLC). This structure protects your personal assets from business debts. Filing costs range from $50 to $500 depending on your state, and you can file through your Secretary of State’s website.

Secure your federal and state requirements

First, get a free Employer Identification Number (EIN) from the IRS website. You will need this for taxes and business banking. While there is no specific federal candle-making license, your labels must comply with the Fair Packaging and Labeling Act, enforced by the Federal Trade Commission (FTC).

Many new makers overlook labeling rules, which can lead to issues. Your labels must state the product identity, net quantity of contents, and your business name and address. Also, register for a state sales tax permit through your state's department of revenue.

Obtain local permits

Check with your city or county clerk’s office for a general business license, which can cost between $50 and $100. If you operate from home, you will likely need a Home Occupation Permit. This ensures your business activities do not disturb your neighborhood.

Here are 4 immediate steps to take:

• File for an LLC with your Secretary of State.
• Apply for a free EIN on the IRS website.
• Review the FTC’s labeling requirements for consumer goods.
• Contact your city clerk’s office to ask about a home occupation permit.

Step 3: Secure your business insurance

Product liability insurance is your top priority. It protects you if a candle malfunctions and causes a fire or property damage. Many new sellers think general liability is enough, but this specific coverage handles claims directly related to your products.

A combined general and product liability policy typically costs between $400 and $1,500 per year. A coverage amount of $1 million is a standard starting point. If you operate from home, also check if your homeowner's policy covers business activities because most do not.

You might want to get quotes from providers who understand artisan businesses. The Handcrafted Soap & Cosmetic Guild (HSCG) offers group rates to its members. You can also look at Next Insurance and Hiscox, which specialize in small business policies.

Once your business grows, you may need more coverage. If you hire employees, you will need workers' compensation. A commercial auto policy is necessary if you use a vehicle primarily for business, like for craft fair deliveries.

Here are 4 immediate steps to take:

• Request a quote for a $1 million product liability policy.
• Review your homeowner's insurance to see what it excludes for home businesses.
• Compare annual premiums from the Handcrafted Soap & Cosmetic Guild and Next Insurance.
• Ask a local farmers market about their vendor insurance requirements.

Step 4: Set up your workspace and buy equipment

Workspace requirements

You can start your candle business from home in a dedicated space of about 100-150 square feet. This gives you enough room for production, curing, and storage. Before you begin, check your local zoning ordinances for any restrictions on home-based businesses, especially concerning flammable materials.

Equipment and suppliers

You do not need a lot of expensive gear to start. A large pouring pot will cost between $50 and $150, a digital scale runs $20-$40, and a good thermometer is about $15-$30. A heat gun, which helps fix surface flaws on candles, is another smart purchase for around $20-$40.

When you are ready to buy supplies, look at reputable vendors like CandleScience or The Flaming Candle. Many new makers make the mistake of ordering too much inventory at once. You might want to start with smaller amounts, like a 10 lb bag of wax and 1-4 oz fragrance oils, to test your products first.

Here are 4 immediate steps to take:

• Measure a 10x10 foot area in your home to designate as your workspace.
• Search your city’s website for its home occupation permit rules.
• Price out a starter kit with a pouring pot, scale, and thermometer.
• Compare the cost of a 10 lb bag of soy wax from two different suppliers.

Step 5: Set up your payment processing

Choose your payment solution

You will need a way to accept payments both online and in person. Many new sellers are surprised by high transaction fees from traditional processors, which often range from 2.5% to 3.5% plus monthly charges. Look for a solution with transparent, low rates.

For candle businesses that sell at craft fairs or local markets, accepting payments on-the-go is a must. For this, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and done.

At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for managing cash flow at pop-up events. Your money is available right on your JIM card as soon as the sale is done, with no waiting for bank transfers.

Getting started is straightforward:

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done.

Here are 3 immediate steps to take:

• Compare transaction fees from two different payment processors.
• Download the JIM app to explore its interface.
• Decide if you will sell online, in-person, or both to determine your payment needs.

Step 6: Secure your funding and manage finances

Find your startup capital

You can fund your initial launch with an SBA Microloan, which offers amounts up to $50,000, though most new candle businesses start with $5,000 to $10,000. Interest rates typically fall between 8% and 13%. Another option is Kiva, which facilitates 0% interest crowdfunded loans.

For your first six months, you should plan for $1,500 to $3,000 in working capital. This covers inventory restocks, marketing expenses, and fees for craft fairs. Many new owners underestimate this figure, which can strain cash flow just as the business gains momentum.

Look into grants and manage your money

You might also qualify for grants, which you do not have to repay. The Amber Grant awards $10,000 monthly to women entrepreneurs. Also, check with your local Small Business Development Center (SBDC) for regional grant programs that may be available to you.

Once you have funds, open a dedicated business bank account. It is tempting to use your personal account at first, but mixing funds creates headaches during tax season and makes it difficult to track your actual profit margins. This simple step keeps your finances organized from day one.

Here are 4 immediate steps to take:

• Research SBA Microloan lenders in your state.
• Create a 6-month budget for inventory and marketing costs.
• Look up the application details for the Amber Grant.
• Open a separate business checking account.

Step 7: Hire your team and set up operations

You will likely handle all operations yourself at first. Consider your first hire when you consistently hit $3,000 to $5,000 in monthly revenue. Hiring too early can strain your cash flow, a mistake many new owners make when orders pick up.

Your first hires

Your first team member is often a part-time Production Assistant. This person helps with pouring, wicking, and packaging for $15-$20 per hour. No specific certifications are needed, but your training must cover safety protocols for handling hot wax and fragrance oils.

Once you expand your online presence, a part-time Social Media Coordinator can manage posts and customer engagement for $20-$25 per hour. This frees you up to focus on product development and business strategy. For scheduling hourly staff, an app like Homebase offers free plans.

Here are 4 immediate steps to take:

• Set a monthly revenue goal that will trigger your first hire.
• Draft a job description for a part-time Production Assistant.
• Outline a safety training checklist for new employees.
• Explore the free scheduling features on Homebase.

Step 8: Market your candles and attract customers

Build your online presence

Focus your efforts on visual platforms like Instagram and Pinterest. Your posts should feature high-quality photos of your candles in lifestyle settings, like on a coffee table or next to a book. Aim to post 3-5 times per week to build an audience.

Many new sellers only use generic hashtags. You will find more engaged buyers if you mix broad tags like #candleshop with specific ones like #woodenwickcandles or #fallscents. This helps your products stand out from the competition.

Connect with customers in person

Your first sales will likely come from local events. Craft fairs and farmers markets are perfect for this. Booth fees often run from $50 to $200, and a good sales target is 3-5 times that amount to ensure profitability.

Once you have some local traction, you might want to approach boutiques about wholesale. The standard wholesale price is 50% of your retail price. This gets your brand into established stores and expands your reach without a direct marketing spend.

Here are 4 immediate steps to take:

• Create a list of 20 niche hashtags relevant to your signature scent.
• Research the booth fees for two upcoming craft fairs in your area.
• Draft a simple wholesale price sheet for your top three candles.
• Plan and photograph one week’s worth of Instagram content.

Step 9: Price your products for profit

You should start with a cost-plus pricing model. Add up your cost of goods sold (COGS) for one candle, which includes wax, fragrance, wick, and vessel. Many new makers forget to factor in their labor, so you might want to value your time at $15-$20 per hour.

For example, if materials cost $4 and labor is $5, your total cost is $9. A standard markup for candles is between 2.5 and 4 times your COGS. This puts your retail price between $22.50 and $36, which secures a profit margin of 60-75%.

Set your price against the market

Once you have your cost-based price, see how it compares to others. Look at five similar candles on Etsy or in local shops. Analyze their size, wax type, and branding to understand why they are priced that way. This prevents you from underpricing your work.

You should also establish your wholesale price early on. The industry standard is 50% of your retail price. If your candle retails for $28, your wholesale price would be $14. This ensures you remain profitable when you start selling to boutiques and other retailers.

Here are 4 immediate steps to take:

• Calculate the total cost of goods sold for one of your signature candles.
• Apply a 3x markup to determine your initial retail price.
• Research the prices of five competing candles on Etsy.
• Set your wholesale price at 50% of your final retail price.

Step 10: Maintain quality and scale your operations

Establish your quality standards

You should create a quality control checklist for every batch. Reference the ASTM F2417 safety standards, which cover things like container stability and flame height. Your own list should include checking for centered wicks, smooth tops, and accurate label placement before you ship anything.

Many new makers run into trouble by not testing each batch. You might want to test burn one candle from every new production run. Track its burn time and scent throw to ensure every customer gets the same high-quality experience. This prevents negative reviews down the line.

Plan your growth

Once you consistently handle 50-100 orders per month, it is time to think about scaling. This is often the point where you might invest in a larger wax melter, which can increase your production capacity from a few candles to dozens at a time.

As your inventory grows, managing supplies becomes more complex. A system like Craftybase helps track your raw materials and finished goods. It automatically calculates your cost of goods sold, which gives you a clear view of your profitability as you expand your product line.

Here are 4 immediate steps to take:

• Create a quality control checklist for your production process.
• Look up the ASTM F2417 standard for candle safety.
• Test burn one candle from your next batch and record its performance.
• Explore inventory management software like Craftybase.

Starting a candle business is a blend of art and strategy. Remember that consistency in your product, from scent throw to label placement, is what builds a loyal following. You have the roadmap, now go light up the market.

And when you make those first sales, keep payments simple. JIM turns your smartphone into a card reader, so you can accept payments for a flat 1.99% fee without extra hardware. Download JIM and you are ready to sell.