Pricing candles involves determining a fair and profitable price for your handmade or manufactured candles. Here's a concise guide to help you price your candles effectively:
1. Calculate Your Costs
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Material Costs: Include wax, wicks, containers, fragrances, dyes, CLP labels and logos and packaging.
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Labour Costs: Estimate the time it takes to make each candle and assign an hourly rate for your work (e.g., £10/hour).
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Overhead Costs: Account for indirect costs like electricity, equipment, and workspace rental.
Example:
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Materials per candle: £2.50
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Labour per candle: £1.67 (10 minutes at £10/hour)
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Overhead per candle: £0.83
Total Cost Per Candle = £5
2. Determine Your Desired Profit Margin
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Aim for a 50% to 100% markup on your costs.
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Formula: Cost × Markup Percentage = Selling Price
(e.g., £5 × 2.5 = £12.50 Retail Price)
3. Research the Market
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Competitor Analysis: Check prices of similar candles in your niche.
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Target Audience: Align pricing with your customers’ perceived value. Premium candles can command higher prices.
4. Adjust for Wholesale and Retail
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Wholesale Pricing: Typically 50% of retail price. Ensure this still covers your costs.
(e.g., Retail Price: £12.50 → Wholesale Price: £6.25)
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Retail Pricing: Maintain a consistent markup to ensure profitability.
5. Test and Refine
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Offer your candles at markets, online, or to friends to gauge customer response.
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Adjust prices based on demand or feedback.
Example Price Structure:
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Cost to Produce: £5
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Retail Price: £12.50 (2.5× cost)
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Wholesale Price: £6.25 (50% of retail)
This structure ensures your candles are both profitable and appropriately priced for the UK market.
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