price question-how does $1 per ounce work?

[sudsnwicks]

I've seen it mentioned here before that one way to figure your price is to charge $1 per ounce. Is this guideline for container candles or pillar candles? Because container candles have the extra cost of the jar while pillars do not - so wouldn't this result in a discrepancy if $1 per ounce is being used? And for containers, if it is a 16 oz container holding 12 oz of wax, would that be $16 or $12?

[BrandNewToCandles]

I wondered that too. I think it's easier to figure your cost per candle and triple it, or quadruple, whatever works for most. That way the cost of the jar is figured in as well.

[BruceCarvesWax]

I've seen it mentioned here before that one way to figure your price is to charge $1 per ounce. Is this guideline for container candles or pillar candles? Because container candles have the extra cost of the jar while pillars do not - so wouldn't this result in a discrepancy if $1 per ounce is being used? And for containers, if it is a 16 oz container holding 12 oz of wax, would that be $16 or $12?

Well the price would be based on the amount of ounces of wax. you use 12 ounce of wax it would be 12.00. If I priced my candles this way, right now, that would include the price of the jar. If you had a fancy jar you would have to adjust for that. Jelly jar candles would hold about 6.25 ounces of wax so the retail would be $6.25, thats very close, maybe closer if you added 50 cents more for the cost of your jar. Soy maybe have to base it on a higher rate since in general takes more FO. Pillars would work with this formula, but only if your area will support the price. Bruce

[sudsnwicks]

Thank you, Bruce. So, if I am understanding this correctly, for container candles it would be $1 per ounce for the wax used, plus a little extra for the jar.

[Tammy1048]

Would that also cover the cost of labels or would you add a little to cover for those?

[prairieannie]

Tammy I would think that since only you know what the cost of your labels are, then only you would know if that would cover them Really folks, you can't just take the $1 per oz and know that it will work for you, you have to know what it's costing you to make your candles. You have to run the numbers. This is just an estimate that works "generally" but the cost per candle seems to be different for everyone, we all pay different amounts for our supplies, shipping, overhead, etc. etc. It's sometimes a PITA to figure things out to fractions of a cent, but it's necessary, and worth it to know whether or not you are going to make enough money on your product to have a successful business.

[Hillary]

I use a formula to determine the price of my jars. I start with the jar cost and then add the price per oz of wax and fo for that jar. I add a misc. charge to cover lables, wicks, and color. Finally, in the end, I add a very small charge to each candle to cover my shipping expenses. Since each candle will have different fo and jars, and shipping costs will vary, I use a estimated cost for those figures. But the whole thing is now in a format so that I just plug in the jar cost and how many oz it holds and I have a price. And still after what sounds very complicated, it generally comes out to around $1.00 per oz, maybe a bit more sometimes.

The formula tells me what the price SHOULD be, but nothing is set in stone.

[sharyl55]

If you plan on selling your candles you really need to run the numbers as PA suggests. If for now other reason than taxes. When you go to your accountant you need to know total sales and total cost for the items sold. That isn't total cost of materials purchased but cost of items sold. Since I'm still a newbie a good percentage of my materials are still used for R&D.

[Tammy1048]

I actually use a formula to figure mine....I just thought that those that were saying a $1 per ounce was going to lose some money and wondered if they had included their labels in that figure.....I take all my materials cost = jar, wax, wick, labels, fo, tags and what ever other materials I use and add that to my labor cost which is what ever amount I want to make per hour.....once I have those two added together I take 25% of that for my background cost which is for utilities, rent, phone, etc....and that is how I get my price....if you don't include your background cost then you are not going to make anything.....because you have to use that electricity or gas, whichever you use to melt your candles......this is just my formula....not sure how everyone else does theirs.....

[BruceCarvesWax]

I actually use a formula to figure mine....I just thought that those that were saying a $1 per ounce was going to lose some money and wondered if they had included their labels in that figure.....I take all my materials cost = jar, wax, wick, labels, fo, tags and what ever other materials I use and add that to my labor cost which is what ever amount I want to make per hour.....once I have those two added together I take 25% of that for my background cost which is for utilities, rent, phone, etc....and that is how I get my price....if you don't include your background cost then you are not going to make anything.....because you have to use that electricity or gas, whichever you use to melt your candles......this is just my formula....not sure how everyone else does theirs.....

Interesting, is your pay per hour added to each candle you make>? That would make for some real expensive candles based on that or a very cheap labor rate. I (and anyone else) would have to base their pay on 30.00 or more per hour since any skilled laborer gets that much to work on your car, or fix the toilet or just about anything. What is "your" pay per hour that you base all this on? I just dont see how adding a hour of labor to each candle will come out. I can pour 450 jar candles in a day and it sure dont take 450 hours labor to do them. I know its just the formula that you use, I just cant see it could work with real life labor rates. Bruce

[Tammy1048]

It really depends on what you want to make per hour and how many candles you can pour per hour.....This is just an example: Let's say you want to make $10.00 per hour....and you can pour 20 candles per hour....then you would take the $10.00 and divide it by 20 which comes to .50 per candle....lets say your supplies cost you $3.00 per candle....so then you would add $3.00 plus .50 which equals $3.50....then take 25% (for background cost) of $3.50 which is .88....then add $3.50 and .88 and that equals $4.38 per candle.

Now if you want to make $30.00 per hour then your cost would go up....but you could divide it by how many candles you can pour per hour....if you pour 20 candles then your labor would be $1.50 per candle then supplies would be $3.00 per candle which equals $4.50 per candle....then take 25% of $4.50 which is $1.13.....then your cost for the candle comes out to be $5.63.....hope this makes more sense to you......

[Tallbabydoll]

Personally I don't see this $1 per oz working with pillars. I just weighed one of my 3"x3" which was 11 0z and a 3"x6" which was 23oz. There is no way, at least not in my area, people are going to pay $11 for a 3"x3" or $23 for a 3"x6". Maybe in some of the high end stores, but not a direct sale from me, or in a craft market atmosphere, I wish.

[sudsnwicks]

Tallbabydoll, what you said is very interesting. Before this, I had thought this method caused a discrepancy for containers, because it didn't account for the jar cost. But it appears that there is a discrepancy for pillars too (I don't make pillars so wasn't aware of this discrepancy). Maybe this is why most of us stick with the cost x 4 method, although for containers there's again a discrepancy because multiplying the jar cost by 4 would tend to overinflate the final price.

[BruceCarvesWax]

It really depends on what you want to make per hour and how many candles you can pour per hour.....This is just an example: Let's say you want to make $10.00 per hour....and you can pour 20 candles per hour....then you would take the $10.00 and divide it by 20 which comes to .50 per candle....lets say your supplies cost you $3.00 per candle....so then you would add $3.00 plus .50 which equals $3.50....then take 25% (for background cost) of $3.50 which is .88....then add $3.50 and .88 and that equals $4.38 per candle.

Now if you want to make $30.00 per hour then your cost would go up....but you could divide it by how many candles you can pour per hour....if you pour 20 candles then your labor would be $1.50 per candle then supplies would be $3.00 per candle which equals $4.50 per candle....then take 25% of $4.50 which is $1.13.....then your cost for the candle comes out to be $5.63.....hope this makes more sense to you......

Yep, I'm really confused now! LOL Ok your first example above, you are figuring your retail or cost? The supplies which are "actual" real costs will come to $3.00 per candle When you add all your other pay per hour stuff and background fees you end up with $4.38 but that has to be what you figured as your cost since it WAYYYY too low to be a retail ? She was asking about 1.00 a ounce to get a retail price not cost. If thats your cost (since it has to be) how do you get your retail price from there? Thats more what the question was about. It seems your way the more effecient you were the less money you would be making? I average 75 half pint jars per hour production, which would add almost nothing to the cost of the candle? I shouldnt have to cut my pay because I'm being efficent and if I were a slouch I should not charge more per candle because I was a lazy azz? LOL I guess I'm saying your way the cost would change each time you find a way to save time and be more efficent which in my case happens very regular. Bruce

[Tammy1048]

Sorry to confuse you more...as I said before this is just my formula the way I figure my cost. For retail I double my cost...once I get my price I don't keep changing it when I find a more efficent way to do things....

Yep, I'm really confused now! LOL Ok your first example above, you are figuring your retail or cost? The supplies which are "actual" real costs will come to $3.00 per candle When you add all your other pay per hour stuff and background fees you end up with $4.38 but that has to be what you figured as your cost since it WAYYYY too low to be a retail ? She was asking about 1.00 a ounce to get a retail price not cost. If thats your cost (since it has to be) how do you get your retail price from there? Thats more what the question was about. It seems your way the more effecient you were the less money you would be making? I average 75 half pint jars per hour production, which would add almost nothing to the cost of the candle? I shouldnt have to cut my pay because I'm being efficent and if I were a slouch I should not charge more per candle because I was a lazy azz? LOL I guess I'm saying your way the cost would change each time you find a way to save time and be more efficent which in my case happens very regular. Bruce

[BruceCarvesWax]

Sorry to confuse you more...as I said before this is just my formula the way I figure my cost. For retail I double my cost...once I get my price I don't keep changing it when I find a more efficent way to do things....

Whew, thanks thats what I was wondering how you got to your retail. That dont leave much room for a wholesale price then does it. I didnt plan on selling wholesale, but as you grow its almost a given that you do some wholesale. I only have one steady account, he bought just under 8 thousand half pints from me last year.. didnt care if I did wholesale or not before I started selling to him ... but it was nice to have the 30 grand extra last year. Bruce

[CraftyChris]

I am a larger producer, and I used to do all kinds of formula's.

I find this works best for me now...

I know my costs on oils to the oz. I know my cost on waxes to the oz. I have a rounded up cost on labels/wicks/wick tabs/dye/glue/damages/wasted wax. If the cost of all these things is .84 (a HIGH average) then it's a $1 in my formula. This only counts per item (say a 16oz jar). A high average counts in wasted labels, broken wick tabs, wasted glue ect. I figure out the misc expense on every item I make. So the misc expense would be different from jars, to pillars, to pies and so on because the packaging changes.

So count the wax and oil per oz, then add in the misc cost, then the glassware. I then take that and round it up about .25 to count for damages in shipping, free freight we offer customers, wax employees spilt on the floor:lipsrseal and so on....

You can double that for wholesale. In some cases, for wholesale (which is 80% of my business) you can't double it, you can get .75 out of it. Such as for tealites and votives. But we make pver 600 votives a day, so my pricing is volume based. We pour jars in case lots only, tealites with left overs from other pours. So again, as you levels increase, your costs decrease, and the way you price your stuff changes as well. I know many of you would never dream of taking a candle that costs you 3.00 to make and selling it for 5.00. But if you are selling 1000 of them, that that is an option. And with melters and so on--it really does not take that much more TIMEWISE that it takes to make 100 jars. I'd rather the sale and exposer of the 1000 jars.

Notice your suppliers have volume breaks? A slab is way more than a case of wax---because it's easier to just send you the case then wrapa dn ship a slab. So you cust the margin a bit.

I hope this helped a bit---I have not had a coffee yet--so this rambled a bit....lol:waiting:

[sudsnwicks]

Thanks, CraftyChris! Your example is helpful.