A handmade candle earns a wide margin direct and a thinner one wholesale, and the vessel is often the biggest single cost, more than the wax. Fragrance oil is the other big one. Margin = (price − cost) ÷ price. In the example below, an 8-ounce jar candle costs $6.47 to make and sell at a market and goes for $24.00, a 73% margin. A month of four ways of selling brings $8,360 of sales and about $5,510 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- An 8-ounce candle at market: $6.47, $24.00, 73%.
- The jar and lid often cost more than the wax.
- Fragrance load decides the rest.
- Wholesale earns less; check it against full cost.
- TaroStack keeps wax, fragrance and jars counted and costs every batch. More below.
A candle, costed
Lantern Street Candle Co., a made-up candle maker in Lancaster, Pennsylvania, pours 24 eight-ounce jar candles at a time:
| An 8-ounce jar candle, at market | Cost |
|---|---|
| Soy wax, fragrance oil, wick | $2.10 |
| Jar, lid and labels | $2.40 |
| Labor: 90 minutes a batch of 24 at $20 an hour | $1.25 |
| Card fees, 3% of $24.00 | $0.72 |
| Cost | $6.47 |
How a candle's price is set is in how to price homemade candles, and the business year in candle business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| 8 oz jar candle | Markets and shop | $24.00 | $6.47 | $17.53 | 73% |
| 8 oz jar candle | Boutiques, wholesale | $12.00 | $5.75 | $6.25 | 52.1% |
| 8 oz jar candle | Online, shipped | $26.00 | $8.25 | $17.75 | 68.3% |
| Votive gift set of 4 | Holiday markets | $20.00 | $5.90 | $14.10 | 70.5% |
The boutique candle earns 52.1%; the market candle 73%.
A month's numbers
A November month at Lantern Street Candle Co.:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| 8 oz jar candle, markets and shop | 150 | $3,600 | $2,630 |
| 8 oz jar candle, boutiques | 200 | $2,400 | $1,250 |
| 8 oz jar candle, online | 60 | $1,560 | $1,065 |
| Votive gift set of 4, holiday markets | 40 | $800 | $564 |
| Month | $8,360 | $5,508 |
Boutiques take the most candles and bring a third of the gross profit. The labels candles need are in candle business license.
Get the calculator
Download the candle margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one cost a candle. Fragrance bought from a new supplier, jars that went up a quarter, and candles that tunnel and get repoured change the real margin.
How TaroStack does it
TaroStack keeps wax, fragrance and jars counted, and costs every batch.
Supplies in their units. Wax bought by the 50-pound case is used by the pound, fragrance by the ounce, and jars by the each.
Designs as recipes. Each candle is a recipe of its supplies, so a batch takes them off stock and is costed from what they cost, and good and rejected pieces are recorded.
Reordering. Supplies come up on a reorder list in days of cover, worked out from how fast they're used.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Supplies on hand | Count the shelf | Stock in its own units |
| What a batch cost | Prices you type | Costed from what you paid |
| Candles repoured | Not counted | Good and rejected on each batch |
| When to reorder | When it's low | Reorder list in days of cover |
Recipes, units, costing and reorder lists are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.