How to Wholesale Homemade Candles

While most candle makers start out making candles as a hobby, many eventually choose to turn that hobby into a full-fledged business. Whether through retailing, fundraising, consignment or wholesaling, there are several choices to expand your business into a valid part-time or full-time enterprise. Here we will discuss the topic of wholesaling as an option for building a solid business.

The concept of wholesaling is simple. You sell your candles to resellers at a reduced price so that they can turn around and sell your candles at a higher price to their own customers.

The way you do this and still make a profit yourself is that the resellers agree to purchase large quantities of candles in exchange for the reduced price. Therefore, while you may be selling your candles at half a typical retail price, you are also selling far more candles than you usually would if you were selling them one at a time.

However, if you are considering wholesaling, there are a few important points to bear in mind.

In order to sell profitably at wholesale, your pricing is critical. You need to decide a reasonable retail price for your candles, and be able to cut that price at least in half to sell them at wholesale.

Most resellers want to be able to charge at least a 100% mark-up, which is double the wholesale price, to even consider buying from you at wholesale. This means that if they buy it from you for five dollars, they need to be able to sell it to their own customers for at least ten dollars. This one hundred percent mark-up by retailers is commonly referred to as a ‘keystone’ mark-up.

Therefore, if you are going to sell your candles at five dollars each wholesale, then you need to make sure you are still making a profit on the candle at that price. Ideally, your total costs, including sufficient pay for your time, should be no more than 50% of the wholesale price, with 30-40% recommended.

The most common mistake novice candle makers make is not truly knowing their costs, and setting their retail price too low. This makes it almost impossible to sell at wholesale in the future because they are not charging enough for their time. Do not sell yourself short. Do your research and see what other candle makers are selling comparable candles for. Then back out your costs and time to make sure that you can afford to set a fair and profitable wholesale price.

There are many ways to go about finding wholesale clients to sell to. You can make personal sales calls to local stores and shops, you can consider hiring sales representatives to do this for you or you can sign a representation agreement with one of the many wholesale showrooms around the country.

There are also numerous ‘gift shows’ held around the country several times a year where buyers visit for the sole purpose of purchasing wholesale merchandise to resell. These shows can yield great results, but are extremely expensive, and you will need many orders to offset your costs. For this reason, wholesale trade shows are often best left to experienced candle makers that have a substantial promotional budget and the production capacity to fulfill an onslaught of orders.

There are also a number of online wholesale directories available for consideration. Typically, you pay a fee to advertise in their directory, but you receive great exposure to resellers looking to purchase products. Again, if you choose to participate in these directories, make sure that you have the production capacity to meet demand. The last thing you want is to have orders from customers, and not enough finished product to fill the orders, or the ability to produce it quickly.

There are many ways to create a successful candle business, and wholesaling is only one of the many ways it may be possible. Explore your options and decide what the best fit is for you and your ultimate goals.

Page Updated: September 30, 2017
© 2016 Craft Answers