Luxury Candle Pricing
Let's talk price on luxury candles...
When I first started out, I really had no intention of taking things this far, I just wanted to make an affordable candle to add interest to and make my little antique glass shop more interesting. My thought process was, why are the good candles so gosh darned expensive? It's ridiculous. And it is. But, that was before I got an education in making a higher end product.
The truth is, the formula for pricing candles for a small business is very simple, it's always pretty much the same, and what this effectively means is, the cost of the goods actually drives the price, along with how much bulk ingredient you can afford to buy at one time and store. That means, a larger operation is always going to have a less expensive candle. As a small operation, I can only buy so much at once although am buying in larger and larger quantities all the time. Then, once you can buy large quantities you have to pay to store it. So yes, it gets crazy.
What I found when starting out with my dollar store vessels and fragrance oils from lower end suppliers is that you get what you pay for. The jars broke under pressure (when burned incorrectly which happened more than you would think) and I wasn't willing to sacrifice safety. The fragrances vary, and if you want fruit loops, you don't have to pay as much for it as a high-end fragrance, and I guess that's to be expected.
Everything varies in price. Most people would be shocked at how much it costs to make a high-end candle. Everything is much much more, from the vessel, to the wax, fragrance, and wick. I find myself eating some of the cost to even be able to offer them for what they are going for - not even being able to follow industry formulas for price. (And I follow the lower formula for price, many people go one level higher). So please don't think, everything is the same cost and it's just a larger profit to us, that is not the case at all. Now whether the difference is worth it to you is up to you. Many customers love the higher end ingredients.
Your profit margin can actually be less with a larger luxury candle even though the retail price is so much higher. That's right, I have to invest a lot more to make less because of the cost of the materials. Make sense? Probably not. So why do I do it? Because the luxury candles are really really cool, LOL. There is a market for everything, and they are fun to make for the luxury candle enthusiasts. I do make a little more per unit with direct sales of these candles, but have to invest a lot more. Ultimately, could use that investment on another product for higher profits. That is why you don't see that many luxury candle makers percentage wise.
Why do we have to follow the formula? If a product is ever to be sold in a store, you have to follow the industry formulas so there is room for the maker and the store owner to make some profit. Because we both have a lot of expenses, that is for sure! Without profit, you go out of business, and then everything is for nothing. That is the reason for the pricing tiers. It's not like makers pull the price out of a hat so they can make a certain amount. I always start with the cost of making the candle and make sure the pricing works for retail distribution.
Because we are making these higher end products does not mean that everything from now on is going to be this price range. I do understand that a $49.95 or higher candle is not for everyone, and that's ok. They are still a good value compared to a department store splurge candle which can be two or three times higher and not necessarily with a nicer vessel. I like nice things... And I also like a little mason jar candles that smell like cake! LOL. We can always put it on sale (ON SALE RIGHT NOW), but the retail price has to be the same for the stores and my website. Just know, a mid-range larger candle is definitely a goal of mine. It's going to take some time to develop a product that would give customers a similar experience for less.
We try to make a variety of products at different price points so there is something for everyone! Thank you for your business, and hopefully if we haven't come up with anything for you yet, we will in the future!