inventory management

How to Successfully Manage Your Candle Business Inventory

In this blog post, we cover why it is important as a candlemaker to manage your raw materials and products using inventory management techniques.

When you own a candle business, inventory management is key. If you don’t keep track of your stock, you may end up selling products that you don’t have available, which can lead to unhappy customers and lost sales.

In this post, we’ll cover everything from ordering new raw material stock to organizing it efficiently in your workspace. By following these tips, you can help ensure that your business runs smoothly and that your customers are always happy!

Why should candle makers track their inventory?

Inventory management is a necessary task for candle businesses, regardless of how you feel about counting stock and keeping it in order. After all, you can’t very well sell candles if you don’t have any on hand.

As any seasoned candlemaker knows, there is a delicate balance to be struck when it comes to inventory. Too much, and you risk being stuck with unsold product; too little, and you could find yourself unable to keep up with customer demand. So how can you ensure that you have just the right amount of inventory on hand? The answer is: having a proper inventory system in place.

For any business, but especially for a small business or startup, it is crucial to keep track of inventory to ensure that you have enough raw materials on hand to produce your products. This is especially true for candlemakers, who often use specific and expensive ingredients that can be difficult to source. If a candlemaker runs out of one of their key ingredients, it could mean delays in production and unhappy customers (goodbye, Etsy Star Seller rating!).

In addition, inventory tracking can help candlemakers to save money by avoiding ordering too much of a raw ingredient that will go unused. Again, as many candle-making materials have expiry dates, this can lead to you throwing out expensive materials you can no longer use to create your candles to ensure you are compliant with GMP.

As a candlemaker, one of the most important things you can do is price your candles with confidence. This means knowing the cost of materials and being able to calculate your profit margin. With this information, you can then decide how much to markup your candles in order to make a profit. As the cost of materials can fluctuate, it’s also important to stay up-to-date on prices. Knowing exactly what goes into each of your products to be able to cost your products and set prices also requires a good inventory tracking system.

By keeping careful track of inventory, candlemakers can be sure that they always have the supplies they need to keep their business running smoothly.

How do candle businesses keep inventory?

Any good candle-maker knows that it takes more than just some wax and a wick to make a great candle - it takes careful planning and organization, too. That’s why it’s important to have a system in place for tracking your raw material inventory. After all, you can’t make a great candle if you don’t have the right ingredients on hand.

Physical inventory systems for your candle business

One simple system you can start implementing almost immediately is to keep all of your raw materials organized in bins. This way, you can quickly see what you have on hand and restock as needed.

Try to organize their raw materials in a way that makes sense for your particular production process. For example, you may want to keep all of their waxes in one area, all of your scents in another area, and all of your wicks in another area. This will help you easily find the materials you need when you are ready to make a batch of candles.

Related: Handmade inventory storage and the home office deduction »

Additionally, you may want to consider organizing your materials by type or by color. For example, you could keep all of their white waxes together, all of your blue waxes together, and all of your red waxes together.

Don’t forget to label your material bins well, and consider using SKUs to ensure that you always reliably reach for the correct material when making that next batch.

Once you have your physical material stock organized, you can now step up to implementing a software solution to start tracking your candlemaking inventory.

What inventory systems are available for candle makers?

There are a number of software options available that can help you to track your inventory. One option is an Excel spreadsheet. This can be a good option if you are already familiar with Excel and are comfortable using it for other purposes. However, it can be difficult to keep track of multiple items in a large spreadsheet, and once those sales start coming in and you start ramping up your production this solution to track your inventory typically starts becoming unwieldy.

Another option is inventory software designed for candle makers in mind. This type of software is designed to help you track your inventory, production batches, COGS, and as well as your sales and expenses, and typically integrates with your favorite sales channels to make data entry a breeze.

This can be a good option if you are planning for your candle-making business to grow.

How to track your candle production

As a candlemaker, one of the most important things you can track is what raw ingredients have been used for each of your finished products. This way, you’ll know exactly what goes into each candle and can be sure that your customers are getting a quality product. There are a few things you should keep in mind when tracking your candle batches. First, be sure to include the name of the material and its source. This way, you can trace back any problems with the candle to a specific batch of wax or wick.

Second, include the date that the material was received and any expiry dates relevant to the material. This will help you keep track of how long it’s been sitting around and whether it’s still fresh.

Finally, include any special instructions for working with the material. For example, if the wax is particularly brittle, you might want to note that on your production notes. By taking the time to document your candle-making batches, you can help ensure that your candles are of the highest quality.

Good inventory systems, like Craftybase, include ways you can create manufacturing records that will detail exactly which materials you used to create a specific product (right down to the lot number level).

How much inventory should I start with candles?

If you’re starting a candle business, the question of how much inventory to carry is a burning one. (Pun intended!). The answer, of course, depends on a variety of factors, such as the type of candles you sell, your target market, and your sales strategy. For example, if you sell luxury candles with high price tags, you’ll likely need less inventory than if you sell mass-market candles at a lower price point. Similarly, if you rely heavily on online sales, you’ll need less inventory than if you sell primarily through brick-and-mortar stores.

Ultimately, the best way to determine your ideal inventory levels is to start small and gradually increase your stock as your business grows. This will help minimize your risk and ensure that you always have just enough candles on hand to meet customer demand.

Once you have those sales coming in, you’ll want to be carefully tracking sales data so you can start to predict your future demand: this is where inventory systems for candlemakers can truly shine.

What is a good profit margin for candles?

If you’re selling candles, the question “What is a good profit margin for candles?” is a bit like asking “How long is a piece of string?” The answer depends on a number of factors, including the type of candle, the price point, the production costs, and the desired level of profit.

However, as a general rule of thumb, most businesses aim for a profit margin of around 50%. This usually gives them enough room to cover their costs and still make a reasonable profit. Of course, some businesses may aim for a higher or lower profit margin depending on their particular circumstances, so use this as a rough guide.

See also: How do I calculate my profit margins on my handmade products?

Conclusion

Any candlemaker who wants to be successful in their business needs to track their inventory of both raw materials and products. Having a good inventory management system in place from the get-go will allow you to see what items you need to restock and also keeps you from running out of supplies when you need them.

Additionally, it will also help you to assess which candle products are selling well and thus decide what new products to make, and assist in pricing your products with confidence.

Nicole Pascoe Nicole Pascoe - Profile

Written by Nicole Pascoe

Nicole is the co-founder of Craftybase, an inventory and bookkeeping software product designed specifically for handmade sellers. She has been working with, and writing articles for, Etsy sellers for the last 12 years. Her passion is to help handmade sellers to become more successful with their online endeavors by empowering them with the knowledge they need to take their business to the next level.