How to Calculate the Cost Per Candle

Cost per candle is everything one candle uses, added up: wax, oil, jar, wick, lid, label, box, and a share of your labor and overhead. Do the math from what you actually paid per pack, not from a rough guess. Every price below is an example, not a real quote.

What are the steps?

1. List every material in one candle. Wax, fragrance oil, jar, wick, lid, label, box, tissue, anything that ends up in the product.
2. Get the cost per unit of each. Divide the pack price by the pack size, in the unit you use (ounces for wax and oil, each for jars and wicks). Include shipping you paid for that pack.
3. Multiply by what one candle uses. If the candle holds 8 oz of wax, multiply 8 by the wax cost per ounce.
4. Add labor. Hours for the batch times your hourly rate, divided by the candles in the batch.
5. Add overhead. Monthly costs like rent for your space, insurance and software, divided by the candles you make in a month.
6. Add it up. The total is your cost per candle. Check it against your last order of supplies every few months.

Worked example

Take a candle with 8 oz (227 g) of wax at 8 percent fragrance load, so it holds 8.64 oz (245 g) with the oil. If your 8 oz (227 g) is wax and oil together, the wax is 8 / 1.08 = 7.41 oz (210 g). All prices are examples.

Now labor and overhead:

• Labor: a batch of 24 candles takes 2.5 hours at $16 an hour. 2.5 x 16 = $40, and $40 / 24 = $1.67 per candle.
• Overhead: $120 a month over 200 candles a month = $0.60 per candle.

Total: 6.04 + 1.13 + 1.67 + 0.60 = $9.44 per candle.

Check each line: 42 / 160 = 0.2625, and 0.2625 x 8 = 2.10. 18 / 16 = 1.125, and 1.125 x 0.64 = 0.72. 27 / 12 = 2.25. 12 / 100 = 0.12. 10.20 / 12 = 0.85. Materials: 2.10 + 0.72 + 2.25 + 0.12 + 0.85 = 6.04.

What do I do with the number?

It is the floor for your price. Craftybase suggests dividing cost by one minus your target margin. At a 50 percent margin, $9.44 / 0.50 = $18.88. CandleScience says a 25 to 50 percent margin is a reasonable range for a new candle business, and that wholesale is typically 2 times cost. Our pricing guides take it from there.

Why include labor and overhead?

Because they are real costs. CandleScience counts labor as part of fixed costs, and says to add variable and fixed costs together for total cost. If you leave them out, a candle that "costs $7.17" may cost you $9.44 once your time and space are counted.

Common mistakes

• Using the price of a bulk pack as the unit price. Divide by pack size.
• Leaving out shipping on supplies. A $42 bag of wax with $12 shipping really costs $54.
• Forgetting wax and oil that stays in the pouring pitcher or spills. Add a small waste allowance if it is real in your shop.
• Counting 8 oz as the weight when your candle includes oil. Know whether 8 oz is the wax or the finished candle.
• Never updating. CandleScience advises refreshing costs every few months, because prices drift.
• Skipping the lid, label, tissue or box because they feel small. Together they were $1.98 in the example.

Questions

Should I include my own time in cost per candle?

Yes, if you want to know whether the business pays you. If you cannot pay yourself yet, work the number both ways: with labor, and without it, so you see what a candle costs and what it earns.

How do I count a candle that uses a fraction of a wick or label?

Use the unit you buy. If a wick comes 100 to a pack, each one is a hundredth of the pack price. If a roll of labels has 250, each label is one 250th.

What if a supplier raises prices?

Update the unit cost and recalculate. If the wax in the example goes from $42.00 to $48.00 a bag, the per-ounce price becomes 48 / 160 = $0.30, and wax in a candle goes from $2.10 to $2.40. That is 30 cents more for one ingredient.