H everybody, I'm Charlotte from the Wooden Wick Co. and today I'm here with
Jeff Standley from Stanley handcrafted. Not only is Jeff an amazing resource for
educational videos on YouTube and educational information on Facebook, but
he also owns his own candle making business. Today Jeff's going to be sharing
his insight on how to price your candles. Pricing candles is definitely something
you want to pay attention to, something that you really want to take a lot of
time to to really make sure that you do it right - not only to keep yourself
competitive but to make sure that you're set up well so that you can compete with
wholesale private label retail, and most importantly so that you make money! For
some people candle making is a hobby it's a fun DIY project, but if you want
to start your own candle making business you definitely need to spend a lot of
time and thought into your pricing so that you can be sure you're setting
yourself up to make a profit. That can include free shipping, down the road a
marketing budget, and the advertising that you want to do so this is a really
important aspect of making candles, is understanding your pricing.
Absolutely, because a lot of this stuff, the pricing like you just said with
marketing, with free shipping, with anything like that - all of that is going
to come basically out of the profit margin of your candles, so making sure
that those are set right is just gonna set you up for
future success. Because if you start out with them wrong it's hard to raise your
prices down the road once you get going. Yes, you have a following - always easier
to lower your prices than have to raise them in the future.
Absolutely. So Jeff, tell us a little bit about how you would go about figuring
out what your costs are on a candle. Well the basic formula which I tell everybody
to start out with just to see what your your kind of initial price is gonna be,
is basically to go through and calculate everything - and there's some calculators
out there that will kind of breakdown everything for you you find out how much
your waxes per ounce, how much of how many ounces you're putting into each
candle, how much your shipping is to get all those supplies to your house, the
wick costs, the label cost, you're driving around -
you can factor in like electricity and everything like that also, but basically
find out what your base minimum cost is just to make a single candle or a single
batch of candles. The typical formula is once you find out your cost wholesale
is times two, so say you make a candle for five dollars wholesale is going to
be ten dollars, and then retail is going to be times two on top of that so if
your your cost is five dollars wholesale is ten dollars retail should be twenty
or more and you definitely don't want to go lower than that because you start
eating into your own profit margins, and then of course it goes well past that.
Also I mean that's a really awesome simple formula to use, so two times your
cost wholesale, two times your wholesale cost it for retail. Great starting out
formula, good place to begin. Jeff mentioned adding in your
overhead costs as well, especially if you plan to grow your business quickly
that's a consideration that you're going to want to take. Yeah definitely.
So Jeff, tell us kind of your philosophy on selling wholesale - do you think it's
something that someone should factor into their plan? Should you focus on
retail when you start out? Where should you begin? I would definitely focus on
retail first, just because it's the easiest one to go to and the reason I
say easiest is because depending on the shop that you get into, you can start
relatively small - stock them with 20 candles, 40 candles, 100 candles, and then
once you get over the wholesale you're gonna find people that want a hundred
plus candles, well hopefully! And when you're first starting out you typically
don't have the supplies to make a hundred candles in a day, so starting out
smaller retail, smaller shops, boutiques and stuff like that - where they're gonna
stock 20 candles, 40 candles, it's just easier to start out with. And then once
you kind of gather some gear and you can produce a couple hundred candles in a
weekend, then it's a good idea to start wholesale because you'll be able to
supply them. I think that's a great suggestion. One other point that I want
to touch on are your labor costs. So the difference in cost to make one candle
versus 50 candles - your labor cost obviously isn't going to increase times
50 to make 50 candles. So for somebody who's just starting out, do you
suggest they price their labor based on making one candle at a time or making a
whole batch? I would definitely go more towards a whole batch just because
making one candle, it's going to seem like it costs a lot more because your set-up
time is going be the same as 50 candles, your melting time, your pour times,
your waiting around times, it's going to be around the same So if
it takes you four hours to make just one or two candles, if you get bigger
equipment and stuff like that - bigger pouring pitchers - you can probably make
40 candles in that same time, so your cost on that is going to go down
exponentially. That's great advice, so along with just the technical
information on calculating your costs, how to markup your candles,
there's also another consideration that you need to think about which is what is
your market and who are you selling your candles to. So you may be selling to
somebody who really cares about getting a lower priced candle and and feeling
like they got a good deal, or your market may be somebody who doesn't care so much
about costs and they're looking for a really high-quality product. So when
you're pricing your candles and when you're even starting out to figure 'do I
want this jar or do I want this jar?' or 'what type of fragrance do I want to use?'
make sure that you first determine who your market is. Absolutely. That can be
based on what type of person you want to sell to, whether your candles have
natural positioning or luxury positioning or low cost positioning, and
where are you going to sell them. That's a big one right there and I'll
throw in - based on the area that you're in, just take a look around, the small
shops. If you're in a place that has - I grew up in a small town so there's not a
lot of boutiques there where you're going to find $100 candles - so if you're
going to go into a market like that you would definitely want to see what they
have in the area, and of course you're probably looking at smaller vessels,
smaller price, and you don't want to make a candle that costs you twenty dollars
that you really can't sell for $40 in an area that may not support it. So you
would definitely want to kind of scale back get to the smaller candle - something
that's going to have a lower cost so that you actually make money in that
area. And then like you said, if they're like in this area
specifically, there's a lot of nice boutiques around here, so you could
definitely find some places around here that would absolutely welcome a higher
priced candle. Yeah I think that's absolutely great advice.
So do your market research, know who your competition is, and know what the
opportunity is, then find your niche and rule it! Yeah definitely.
That's it today guys, thanks so much for watching! Follow Standley Handcrafted and
The Wooden Wick Co. on YouTube for more makers tips and tricks. Happy Making!