How to Price Your Handmade Candles: A Guide to Maximizing Profit

Pricing handmade candles can be tricky—set the price too high, and you risk losing customers; too low, and you won’t cover your costs or make a profit. Finding the right balance is essential for running a sustainable and profitable candle business. In this guide, we’ll walk through the best pricing strategies, cost calculations, and profit-boosting techniques to help you price your handmade candles effectively.

1. Understanding Your Costs

Before setting your candle prices, you need to calculate your total costs to ensure you’re covering expenses and making a profit.

a) Material Costs

These include all the raw materials used to make your candles:

• Wax (soy, paraffin, coconut, or beeswax)

• Wicks

• Fragrance oils and essential oils

• Dyes and colorants

• Jars, tins, or molds

• Labels and packaging materials

✅ Formula: Material Cost per Candle = Total Cost of Materials ÷ Number of Candles Made

b) Labor Costs

Factor in the time it takes to make your candles. Even if you make them yourself, your time has value.

• How long does it take to make one batch of candles?

• How much time is spent on labeling, packaging, and shipping?

• If you plan to scale, will you need to hire employees?

✅ Formula: Labor Cost per Candle = (Hourly Wage × Hours Spent) ÷ Number of Candles Made

c) Overhead Costs

These are the expenses necessary to run your business but aren’t directly tied to materials.

• Rent (if you use a workspace)

• Utilities (electricity, heating for wax melting, internet)

• Equipment (scales, pouring pitchers, heat guns, etc.)

• Marketing and website costs (advertising, domain, Etsy fees)

✅ Formula: Overhead Cost per Candle = Total Monthly Overhead ÷ Estimated Monthly Candle Sales

Pro Tip: Even if you work from home, include a portion of your utilities and equipment costs in pricing.

2. Choosing the Right Pricing Strategy

Once you know your costs, it’s time to set prices using a strategy that ensures profitability while remaining competitive.

a) Cost-Plus Pricing (Simple and Reliable)

This is the easiest way to price your candles. You calculate your total costs and add a markup to determine your selling price.

✅ Formula: Selling Price = Total Cost per Candle × Markup (e.g., 2x or 3x)

Example:

• Material Cost per Candle = $4.00

• Labor Cost per Candle = $2.00

• Overhead Cost per Candle = $1.50

• Total Cost = $7.50

• Selling Price with a 2.5x markup = $18.75

📌 Best for: Small handmade candle businesses that want a consistent profit margin.

b) Competitive Pricing (Staying Market-Ready)

Look at other candle makers in your niche and price accordingly.

✅ Steps:

1. Research candle prices on Etsy, Shopify, and local boutiques.

2. Compare materials and packaging styles.

3. Price slightly higher if offering premium materials (e.g., wooden wicks, luxury scents).

4. Price slightly lower if entering a crowded market.

📌 Best for: New candle businesses trying to attract customers.

c) Value-Based Pricing (Premium Brand Approach)

Instead of basing your price on costs, this strategy focuses on what customers are willing to pay for a high-end experience.

✅ Factors that justify premium pricing:

• Unique branding and luxury packaging

• High-end ingredients (organic wax, essential oils, crystal-infused candles)

• Hand-poured, artisanal craftsmanship

• Limited-edition or custom scents

📌 Best for: Luxury and boutique candle brands that want higher profit margins.

Pro Tip: Offering bundles and gift sets increases perceived value without significantly increasing costs.

3. Factoring in Profit Margins

A good profit margin ensures your business stays sustainable. Most successful candle businesses aim for 50-70% profit margins.

✅ Formula to Calculate Profit Margin: Profit Margin (%) = ((Selling Price - Total Cost) ÷ Selling Price) × 100

Example:

• Selling Price = $20

• Total Cost = $7.50

• Profit = $12.50

• Profit Margin = 62.5% ✅

📌 Recommended Profit Margins by Market:

4. Adjusting Prices for Online & Wholesale Sales

If you sell online or in retail stores, you need to adjust your prices accordingly.

a) Online Sales (Etsy, Shopify, Website)

• Factor in platform fees (Etsy takes 5% transaction + 6.5% processing fee).

• Shipping and packaging costs must be included in the final price.

• Offer free shipping by slightly increasing the product price.

b) Wholesale Pricing (Selling to Retailers)

• Retailers expect wholesale prices to be 50% of your retail price.

✅ Formula: Wholesale Price = Retail Price ÷ 2

Example:

• If you sell a candle for $20, your wholesale price should be $10.

• To remain profitable, your total cost per candle must be $5 or lower.

📌 Best for: Scaling your business and selling in bulk.

5. Strategies to Increase Profits Without Raising Prices

• Use cost-effective materials: Buy wax, fragrance oils, and containers in bulk.

• Increase efficiency: Streamline production to reduce labor costs.

• Upsell & bundle products: Offer matching room sprays, wax melts, or gift sets.

• Create limited-edition collections: Seasonal releases encourage higher spending.

• Charge for personalization: Custom labels, gift wrapping, or scent blends add value.

Pro Tip: Subscription boxes or candle-of-the-month clubs generate recurring revenue and increase customer retention.

Turn Your Candle Business into a Profitable Brand!

Pricing your handmade candles correctly is key to building a successful and profitable business. Whether you’re just starting or scaling up, understanding your costs, setting competitive prices, and maximizing your profit margins will ensure long-term success.

In my Candle Making Course, I teach everything from production techniques to branding, marketing, and pricing strategies. You’ll also get access to my recommended supplier list for high-quality materials at the best prices.

Want to grow a profitable candle business? Join my Candle-Making Course (click here) and start selling with confidence!

Happy candle making!