The National Candle Association estimates US candle sales at $3.2 billion per year, and forecasts say it’ll rise to almost $5 billion this year.
That’s a growing market, but turning wax and fragrance into a profitable business requires more than creativity. You need quality products, smart pricing, and proper legal setup.
This step-by-step guide walks you through how to start a candle business, from learning the craft to registering your company and making your first sale.
Is a candle business profitable?
It can be, if you manage costs and build strong branding.
Many handmade candles cost between $3–$8 to produce and can sell for $15–$40+, depending on your market positioning.
Profit depends on:
- Raw material costs (wax, fragrance, wicks)
- Packaging quality
- Labor time
- Platform fees
- Marketing expenses
- Insurance and compliance costs
Candles benefit from repeat purchases, gift buying behavior, and seasonal demand. But profitability requires careful pricing and consistent quality.
Step 1: Learn how to make quality candles
Before looking at how to start your own business, learn the craft properly.
You’ll need to understand:
- Wax types (soy, beeswax, paraffin, coconut)
- Wick sizing
- Fragrance load percentages
- Melt and pour temperatures
- Burn testing for safety
Most beginners start with soy wax and container candles because they’re easier to work with and beginner-friendly.
Quality matters. Poorly tested candles can tunnel, produce soot, or become unsafe. Take your time mastering the basics before selling.
Step 2: Test your candles thoroughly
Never sell a candle you haven’t tested. Testing should include:
- Multiple full burn cycles
- Checking wick performance
- Monitoring container heat
- Evaluating scent throw (cold and hot)
- Watching for soot or excessive smoke
Candles contain flame, safety isn’t optional. Proper testing protects both your customers and your business.
Step 3: Define your niche and target market
The candle industry is competitive, so differentiation is key. You can position your candles as:
Mass Market ($8–$15): Simple packaging and classic scents with broad appeal.
Mid-Market ($16–$34): Unique scent blends, stronger branding, gift-worthy packaging.
Luxury / Prestige ($35+): Premium fragrances, elevated storytelling, high-end packaging.
You can also niche by:
- Eco-friendly or vegan candles
- Spiritual or intention-based candles
- Humor-based labels
- Minimalist décor
- Outdoor or seasonal collections
The clearer your niche, the easier it is to market and price your candles confidently. Strong market positioning helps customers immediately understand who your product is for and why it’s worth the price.
Step 4: Create a simple business plan
Your business plan doesn’t need to be complex.
Outline:
- Your niche and target customer
- Startup budget
- Pricing model
- Where you’ll sell
- Revenue goals for the first 6–12 months
A written plan helps you stay focused and make smarter decisions as you grow.
Step 5: Calculate your startup costs
One of the biggest advantages of starting a candle business is relatively low startup costs, especially from home.
Basic home-based startup estimate
- Wax and fragrance (initial inventory): $300–$600
- Containers and packaging: $200–$500
- Equipment (melter, scale, thermometer, pour pot): $200–$800
- Branding and labels: $100–$300
- Website or marketplace setup: $0–$500
- Business registration and insurance: varies
Many home-based candle businesses start between $1,000–$3,000. Costs increase if you rent commercial space, buy in bulk immediately, or hire staff.
Step 6: Register your candle business
Even if you’re starting small, operating legally protects you long term.
Choose a business structure
Sole Proprietorship
The simplest structure. You operate under your own name, but there’s no separation between your personal and business assets.
Limited Liability Company (LLC)
An LLC provides personal liability protection, meaning your personal assets are generally protected if your business faces legal claims. Because candles involve fire risk and potential product liability, many entrepreneurs choose to create an LLC for added protection.
Complete required registrations
Get an EIN
If you plan to open a business bank account or hire employees, you’ll need an Employer Identification Number (EIN) from the IRS. Even solo business owners often obtain an EIN to separate personal and business finances.
Register a DBA (if needed)
If you’re operating under a business name that’s different from your legal name, you’ll need to register a “Doing Business As” (DBA) with your state or county.
Business license and sales tax permit
Most cities or counties require a general business license before you can legally operate. This license registers your company with your local government and gives you permission to conduct business within that jurisdiction.
If your state collects sales tax on candles, you’ll also need a sales tax permit to collect and remit taxes properly.
Always check your state’s small business portal and local city regulations to confirm requirements.
Operating without proper registration can result in fines or penalties.
Step 7: Get insurance coverage
Because candles involve heat and flame, insurance is strongly recommended.
General liability insurance
General liability insurance protects your business if your product causes property damage or bodily injury. This can include claims related to fire damage or accidents involving your candles.
Product liability insurance
Product liability insurance specifically covers claims arising from defects, improper labeling, or safety issues. Many retailers and wholesale buyers require proof of product liability coverage before carrying your products.
Skipping insurance can put your personal assets at risk, especially if you operate as a sole proprietor.
Step 8: Develop your brand identity
Branding determines whether customers see your candle as a $12 product or a $38 product.
Define:
- Your brand story
- Emotional appeal
- Packaging style
- Label design
- Target audience
Strong branding builds trust and allows you to charge higher prices.
Before finalizing your name:
- Check domain availability by performing a business entity search
- Confirm social media handles
- Run a basic trademark search
Consistency across packaging, website, and marketing builds recognition.
Step 9: Decide where to sell
You have several beginner-friendly options:
Online marketplaces
Platforms like Etsy and Amazon Handmade give you access to built-in audiences but charge fees that reduce profit margins.
Your own website
An ecommerce website gives you full control over branding, pricing, and customer relationships. It requires more marketing effort but offers higher long-term margins.
Local markets and craft fairs
Great for early-stage testing, customer feedback, and building local awareness.
Wholesale to boutiques
Selling in bulk to local gift shops can provide larger orders but lower per-unit profit. Many candle businesses combine multiple sales channels to diversify revenue.
Step 10: Build repeat customers
Customer retention is critical in a product-based business.
Focus on:
- Consistent product quality
- Fast response times
- Clear communication
- Reliable inventory management
- Encouraging reviews
Repeat buyers are more profitable than constantly chasing new customers.
Conclusion
Starting a candle business is accessible, creative, and potentially profitable, especially in a market projected to reach nearly $5 billion in US sales.