Wax Melt Business Plan, With a 12-Month Projection

A wax melt business plan sets out the scents and products you'll make, what each costs and sells for, who buys them, and the first year month by month. Wax melts are an easy start, with a pot, a scale, molds and fragrance oil, and a quick product to make: a batch of 48 clamshells takes about an hour and a half. The business is in the arithmetic around that: fragrance oil is the most expensive ingredient, every new scent multiplies your products, and wholesale clamshells leave a third of what a direct one does. Adding room sprays and reed diffusers, which use the same fragrance oils, raises what each customer spends. In the example below, a home fragrance maker in North Carolina reaches 760 clamshells, 120 room sprays and 60 diffusers a month by month 11, makes a profit from month 1, and ends the year about $27,200 ahead on $51,000 of sales, after paying $20 an hour for the making. Below is a description example, each part of the plan, the scent count, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the products, the scents, where you sell, the goals.
• Cost a clamshell with your time in it; fragrance oil is the biggest ingredient line.
• Price direct, wholesale and gift products separately; wholesale leaves much less per unit.
• Add products that share your fragrance oils: room sprays and diffusers raise the order.
• Keep the scent list short; every scent multiplies your stock.
• Follow your fragrance supplier's use limits and safety data sheets for every product.
• TaroStack keeps recipes, fragrance lots, batches and costs together. More below.

Part 1: the business description

Lantern Wax Studio, a made-up home fragrance maker I use in these examples, writes:

Lantern Wax Studio hand-pours soy wax melts and blends room sprays and reed diffusers in a home studio in Asheville, North Carolina, in ten scents. We sell at craft fairs and markets, online, and wholesale to gift shops. Every batch carries a lot code. In our first year we plan to sell 760 clamshells a month by the holidays, to 15 shops.

Part 2: what a product costs

A batch of 48 clamshells in an hour and a half is $0.63 of time each. The fragrance oil, poured at 10% of the wax by weight, is the single biggest ingredient, so its price per pound moves the cost of every product. How a fragrance load turns into a cost per unit is in how to calculate cost per ounce.

Part 3: customers and prices

A wholesale clamshell leaves $1.57, a third of a direct one, but a shop takes 24 at a time and reorders. A room spray leaves twice what a clamshell does, from the same fragrance oil, which is why a customer who buys melts at a fair is worth showing the sprays. How shops expect a wholesale price to work is in how to price handmade items for wholesale.

Part 4: labels and safety

Home fragrance isn't food or cosmetics, but it still has rules. Your fragrance supplier publishes a safety data sheet and maximum use levels for each oil, by kind of product; stay within them, and keep the sheets with your records. Room sprays made with alcohol are flammable, and products like these may need warning labels under federal and state rules; check what applies before the first sale. Every label should carry the product, the scent, the net weight or volume, use and safety directions, and your business name. This is general information, not legal advice. Wax melts share most of their making with candles; what a candle maker's records look like is in candle inventory software.

Part 5: the first year, month by month

Fixed costs are $460 a month: market and fair fees averaged ($240), marketing and samples ($100), insurance ($45), the website ($40), and software and card fees ($35). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $51,068 and the profit $27,204, on top of $20 an hour for the making. Home fragrance sells hardest in autumn and before the holidays, so if you start in spring, set the template's monthly shares to match.

Part 6: scents and the SKU count

Ten scents across three products is 30 things to stock, plus the fragrance oils, wax, clamshells, bottles, reeds and labels behind them. Each new scent adds three products, another oil to buy in a minimum quantity, and another label. Before adding one:

1. Check the best sellers. If three scents sell half the melts, a new scent competes with the slow seven, not the best three.
2. Count the minimum. A pound of fragrance oil makes about 70 clamshells at a 10% load; a slow scent ties up that oil for months.
3. Retire a scent for each one added, and sell the old one down.

What stock that won't move costs to hold is in too much inventory on hand.

Part 7: the startup budget

Get the template

Download the wax melt business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Thirty products and ten fragrance oils are more than a notebook keeps straight. A shop reorders lavender melts and the lavender oil is down to half a bottle; a customer says a spray smells weaker than the last one, and nobody wrote down which bottle of oil went into which batch; the clamshell price rose in spring and every cost in the spreadsheet still has the old one.

How TaroStack does it

TaroStack keeps the fragrance, the wax and the batches together.

Recipes with fragrance loads. Each product is a recipe with versions, and units convert: buy fragrance oil by the pound, pour it by the gram. "What could I make right now" shows which scents the oils on the shelf can still cover.

Batches with their lots. Recording a batch takes wax, fragrance and containers off stock from the lots used, at what you paid, notes which lots went in automatically, and divides by what came out good. When a customer asks about a weak spray, the batch shows which bottle of oil it used.

And the reorder list in days. The reorder list works in days of cover at the rate each oil really moves, so the lavender is reordered before the shop's order arrives, and stock that isn't moving shows how long since it last went out. Margins are reported by product and by customer.

Recipes, batches, lots, the reorder list and margins by product and customer 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.

Questions people also ask

Is a wax melt business profitable?

It can be. In the example, a home fragrance maker selling melts direct and wholesale, room sprays and diffusers ends the first year about $27,200 ahead on $51,000 of sales, with $20 an hour paid for the making.

How much does it cost to start a wax melt business?

In the example, about $4,800: $3,300 for equipment, fragrance oils, wax, containers, labels, insurance, a market setup and a website, and $1,500 of working cash.

How much should I charge for wax melts?

Work out the full cost of a clamshell, wax, fragrance, container, label and your time, then price direct and wholesale separately. In the example, a clamshell costing $2.34 sells for $7.00 direct and $3.75 wholesale.

How many scents should a wax melt business start with?

Few enough to keep in stock: each scent multiplies your products and ties up a minimum of fragrance oil. Start with your best sellers and retire a scent for each one you add.