A candle retail business that is located in a high human and vehicular traffic location in a cosmopolitan city in the United States of America will make between $120,000 to $250,000.
It is also important to note that homemade candle makers can make between 50 percent to 80 percent profit margins on their candles Whenever an entrepreneur wants to start a new business, one of the first questions they usually ask is to know how profitable the business is or how much they are likely to make on average from the business.
This narrative also applies to entrepreneurs who are looking towards selling candles. They want to know how much they are likely going to make daily, weekly, monthly, and annually from their candle-selling business.
The truth is that there is no one mold-fits-all when it comes to how much a candle retail shop is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average candle shop can make yearly.
Factors That Influence How Much An Average Candle Shop Can Make
The Size of the Candle Retail Business
One cannot conveniently state the amount a candle retail business is expected to make yearly if you do not know the size of the business. The amount a small roadside candle retail business is expected to make will be different from the amount a standard candle retail business franchise with several outlets will make annually even if they operate in the same location.
Of course, the amount invested in a small roadside candle retail kiosk is different from the amount you will invest in a large candle retail business hence the amount they will both make will be different. On average, the approximate cost of starting a candle retail business could range anywhere between $5,000 and $100,000 or more depending on what you want to achieve.
The Location of the Candle Retail Business
When it comes to setting up a new business, location plays a major role which is why feasibility studies and market surveys are essential before settling for a location. Usually, if your candle retail business is located in an area with good human and vehicular traffic, and you have candles from different brands, you may not have to struggle to get people to visit your shop and make purchases.
Please note that the amount a candle retail business that is located in a low traffic area will make yearly will be far lower when compared to the amount a candle retail business that is located in a high–traffic area in a cosmopolitan city will make.
So, if you want to make it big with your candle retail business, then you must be ready to rent a store in a high traffic area, a location with the right demography of people with the purchasing power to buy from you. Please note that you are going to be paying more to rent a store in a high–traffic area.
The Types and Brands of Candles Retailed in the Shop
Another important factor that will determine how much a candle retail business is expected to make yearly is the types and brands of candles that are retailed in the store.
Ideally, a standard candle retail business retails different types of candles such as Paraffin Wax, Soy Wax, Palm Wax, Beeswax, Bayberry Wax, and Liquid Wax Candles et al. Also note that candles such as Votive Candles, Taper Candles, Scented Or Aromatherapy Candles, and Decorative Candles are in high demand and the profit margins are usually high for these brands.
Other Related Products and Services Offered by the Store
Aside from retailing a wide range of candles, retailing other complimentary products such as candle stands, candle saucers, candle holders, candle storage casings and lighters will surely boost the amount you will make from your candle retail business.
So also, if you offer additional services such as making customized candles for your clients, you will position your business to earn more money.
The Management Style of the Candle Retail Business
Another key factor that will determine the amount a candle retail business is expected to make yearly is the management style of the candle retail business.
Trust me, the results you will get when you have a good manager will be far greater than what an average or bad manager will get; definitely, their results will be obvious and different. Even if you give the managers the same conditions to work and the same products to retail.
The Business Model of the Candle Retail Business
There are different business models that a candle retail business can adopt and these business models offer different results. For example, the amount a candle retail business that also runs an online store with deliveries make yearly will be different from the amount a strictly brick and mortar candle retail business will make yearly.
The amount a candle retail business that also sells and operates a franchise will make yearly will be far different from the amount a strictly one location walk-in candle retail business will make. This goes to show that the amount a candle retail business will make yearly is dependent on the business model of the business.
The Advertising and Marketing Strategies Adopted by the Candle Retail Business
Another key factor that will determine the amount a candle retail business can make yearly is the advertising and marketing strategies adopted by the candle retail business. Trust me, there are advertising and marketing strategies that can help a business increase its earnings, but you may be expected to spend more.
But the results you will make will far outweigh the amount you will spend on advertising and marketing. Of course, you don’t expect a candle retail business that is engaging in aggressive advertising and marketing to make the same amount yearly as a candle retail business that is passive with its advertising and marketing.
The Number of Years the Business is in Existence
Lastly, another key factor that will determine the amount a candle retail business is expected to make yearly is the number of years the business is in existence. In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is properly managed. This is so because you would have over the years won loyal customers.
For example, in your first fiscal year (FY1) you might make a hundred thousand dollars ($120,000), in your second fiscal year (FY2) you might make two hundred thousand dollars ($200,000) and in your third fiscal year (FY3) you might make two hundred and fifty thousand dollars ($250,000). Interestingly, most businesses including candle retail businesses usually break even from the third year of operations.
In conclusion, the amount a candle retail business will make yearly is strictly dependent on all of the factors listed above.
Usually, a small–scale but standard candle retail business that is located in a high human and vehicular traffic location in a cosmopolitan city in the United States of America will make between $120,000 to $250,000 annually all things being equal.
Profit Margin of a Candle Retail Business
Please note that in the United States of America, new candle makers can expect to earn between $500 and $1,000 per month and work up to a full-time income. It is also important to note that homemade candle makers can make between 50 percent to 80 percent profit margins on their candles.
This is how it works – price your candles by multiplying your cost of goods sold by two to four times. This will give you a profit margin of between 50 percent and 80 percent.
Have it in mind that the normal markup on candles and similar products is in the 30 to 40 percent range, but generally, a 25 percent to 50 percent margin is a good range for a new candle business.
In essence, the profit margin of candle selling business is between 30 to 60 percent and it includes all the factors involved in manufacturing and getting the candles to the shelf.