making money

[justrightcandles]

o.k. i have a dumb questions and please don't yell at me. I have figured it takes about $2 give or take some to make a 8 oz jelly jar wickless candle. i have seen them sell for at least $6.50. (some places way more) So how do you NOT make money. Is it all the money you need upfront...label, warning label, ink, wesites, logos, labor, that eats profit...etc...

i guess also that you need people to buy your products too huh?

[barncat]

Everyone's cost are different. I can make an 8 oz jar for $1.15 it all depends the quantities you buy your products in. Think about it even more about the dollar stores when they are selling it for $1.

[RobinInOR]

There's always the startup costs - the research $ involved up front. The ongoing overhead can get you too - extra electric for your prestos, insurance, business licenses....

You can make $4 "profit" on a candle, but you can't pay the bills if you just sell 3 candles a month. You've got to be able to move a good quantity. Cash flow problems can get even the most profitable business.

[Twoscentsworth]

All of what Robin said and .... if you make 100 candles but only sell 15 of them you are going to lose money....and sometimes things just don't sell. When I first started almost everyone said you HAVE to have a vanilla FO. Ummmhmmm, I couldn't sell (and still can't) vanilla to save my bottom. So that was $$$ right down the drain.

I also have hundreds of testers in boxes that I haven't had time to clean out the jars SIGH and I am getting ready to toss them because looking at them reminds me of all the $$$$ spent

It also depends if this is a hobby for you or a business. Many more costs associated with a business as Robin stated. Many people go under because they just don't/can't sell enough to stay afloat.

[CandleFreak]

for a lot of us FO's eat at the profit margin....just have to try this and that from everyone! it really blows the budget out of proportion....and testing never ends! As soon as you have one thing mastered you start on 5 other projects!

Discipline is the key! (I am slowly learning!!)

[KristinesShower]

That is precisely why you need to get someone to help you figure the cost of each candle and I don't just mean jar, wick, tab, fo, etc.

You want to figure it ALL in. When I first started, I got the SBDC to help me and they figured what each of my products costed me after (supplies, insurance, rent, utilities, salaries, etc) - then we looked at the costs. You see, even if I end up selling something "at cost" - my cost pays for the supplies, 5 people's salaries (including my own), all the bills and overhead.

So don't think that if you buy X amount of jars and X amount of this and that - that is your cost because it isn't - your real cost is after everything else has been taken into consideration and paid.

Now once you get that figure, every penny after that is "free money" that you can either invest back into the business (which is a great idea) or you can sock away into a savings (which is another great idea)

[Vicky_CO]

Well if it cost you $2.00 to make it then you should be charging anywhere from $6 to $8 for that candle. Your mark up should be 4 times but most of us can only get away with 3 times cost.

In the mark up is where expenses like sales reps come from rent, electricity and all the other over head we have.

Just think what it cost to get in to the shows you have to get that money back somewhere.