Pricing is one of the most uncomfortable parts of starting a wax melt business.
You work out the cost of the wax and fragrance oil, look at what other sellers charge and choose a figure that feels reasonable.
Then the orders begin.
Money comes into the business, but somehow there is never enough left.
You need more wax, labels, packaging and fragrance oil. The printer needs ink. Payment fees are deducted. A discount code has reduced the order value. You spend an evening making, cleaning, labelling and packing without paying yourself anything.
The sales total looks encouraging.
The bank balance does not.
That is what happens when a product is priced to sell rather than priced to support a business.
Your wax melt price needs to cover:
- materials;
- packaging;
- labour;
- overheads;
- waste;
- fees;
- tax where applicable;
- profit.
Starting from scratch? Read How to Start a Wax Melt Business in the UK.
Sales are not profit
When a customer pays £3, £4 or £5 for a wax melt, that money is not yours to keep.
It has several jobs to do.
It may need to cover:
- wax;
- fragrance oil;
- colour and additives;
- product packaging;
- CLP labels;
- postage packaging;
- payment-processing fees;
- website costs;
- insurance;
- equipment;
- utilities;
- waste;
- marketing;
- your time;
- tax;
- profit.
Revenue is the amount the customer pays.
Profit is what remains after the relevant costs have been covered.
A business can generate plenty of sales and still leave the owner with very little.
Why copying competitor prices does not work
It is sensible to understand the market.
It is not sensible to assume another business’s price should be yours.
You do not know:
- what they pay for materials;
- what quantities they buy;
- whether they are VAT registered;
- what packaging they use;
- whether they include their time;
- what fees they pay;
- whether the product is profitable;
- whether their business is supported by another income.
Some sellers may be underpricing.
Others may accept very small margins.
A larger business may receive supplier discounts that are not available to you.
Use competitor prices as market information, not as your calculation.
Calculate the direct material cost
Begin with the materials that go directly into the product.
For a batch of wax melts, this may include:
- wax;
- fragrance oil;
- colour;
- glitter or additives where used;
- mould or clamshell cost;
- product label;
- CLP label;
- primary packaging.
Calculate the cost of the full batch, then divide it by the number of sellable units produced.
For example:
If a batch costs £12 in direct materials and produces 12 sellable snapbars, the direct material cost is £1 per snapbar.
That is only the beginning.
Allow for waste and testing
Not every gram of material becomes a product you can sell.
You may lose materials through:
- testing;
- spills;
- residue;
- damaged products;
- incorrect labels;
- packaging mistakes;
- failed batches;
- samples.
Add a sensible waste allowance.
The exact percentage will depend on how you work and the type of product.
If you repeatedly lose more than expected, do not simply increase the price forever.
Review the process and reduce the waste.
Include packaging properly
Packaging is more than the clamshell or bag holding the wax melt.
Consider:
- product packaging;
- labels;
- tissue paper;
- mailing boxes;
- protective materials;
- tape;
- stickers;
- printed inserts;
- thank-you cards;
- samples.
Some postage packaging is used across the whole order rather than one product.
You can account for it through an average cost per order and divide it by the typical number of items purchased.
Do not ignore small packaging costs.
Ten small costs can easily remove a meaningful part of the margin.
Include payment and platform fees
Your ecommerce platform and payment provider may take:
- a percentage of the transaction;
- a fixed fee;
- monthly charges;
- app fees;
- marketplace commissions.
These costs are easy to overlook because they may be deducted automatically.
Review actual order payments rather than assuming the full selling price reaches your bank account.
Include your overheads
Overheads are the business costs that cannot be attached neatly to one product.
They may include:
- insurance;
- website fees;
- apps;
- printer ink;
- equipment;
- accountancy;
- storage;
- utilities;
- design software;
- email marketing tools.
A simple approach is to total your expected monthly overheads and divide them by the number of units you realistically expect to sell.
Be realistic.
Dividing the overheads by an imaginary sales volume will make the cost per product look artificially low.
Your time is not free
Time is the cost most small business owners avoid.
A wax melt does not make itself.
Your work may include:
- preparing materials;
- weighing;
- melting;
- mixing;
- pouring;
- cleaning;
- curing;
- removing products from moulds;
- labelling;
- photographing;
- listing;
- packing;
- answering questions;
- managing stock.
You may not take a full wage from the business immediately.
That does not make your time worth nothing.
Calculate how long a batch takes and decide what hourly rate the business should eventually support.
For example:
If a batch takes one hour and you want to allow £12 per hour for your labour, that batch has £12 of labour cost.
If it produces 12 sellable units, the making labour is £1 per unit.
You may then need to add packing and administrative time.
Profit is not the same as your wage
Your wage pays you for the work you do.
Profit rewards the risk of owning and investing in the business.
Profit also gives the business room to:
- replace equipment;
- build cash reserves;
- survive quiet periods;
- invest in stock;
- develop products;
- recover from mistakes;
- grow.
If the price only covers materials and your labour, the business may have no money left to become stronger.
Profit is not greed.
It is what allows the business to continue.
Still working out your startup budget? Read How Much Does It Cost to Start a Wax Melt Business?
A simple wax melt pricing calculation
The Wax Room Pricing and Profit Calculator is designed to help you work through these areas without building the spreadsheet yourself.
A basic pricing structure may look like this:
Direct materials per unit
Wax, fragrance, colour, packaging and labels.
Plus labour per unit
Making, finishing and packing time.
Plus overhead contribution
A share of monthly business costs.
Plus waste allowance
Testing, damage, spills and unusable products.
Plus fees
Payment processing and platform costs.
Plus postage contribution if relevant
Any delivery cost the business absorbs.
Plus profit
The amount that remains for the business after the costs have been covered.
Calculate Your Own Product Margin
The free Wax Room Pricing and Profit Calculator helps you include materials, packaging, labour, overheads, waste, fees, discounts and VAT where applicable.
Check the margin, not only the cash amount
Profit margin shows how much of the selling price remains as profit.
For example, a product with £1 profit on a £2 selling price has a different margin from a product with £1 profit on a £10 selling price.
Margins help you compare products.
Some products may sell well but leave very little behind.
Others may have strong margins but sell slowly.
The strongest products often combine:
- reliable demand;
- sensible production time;
- good margin;
- repeat purchasing;
- easy storage and fulfilment.
Do not assume your bestseller is automatically your most profitable product.
Consider VAT before it becomes urgent
VAT can create serious pressure when a business grows and prices have not allowed enough room.
If VAT may become relevant to your business, understand how it could affect the amount you retain from each sale.
Do not wait until registration is approaching before asking whether the current prices can absorb it.
Tax rules and thresholds can change.
Use current official guidance and professional advice for your circumstances.
Test your price against discounts
If you regularly offer:
- percentage discounts;
- multibuy deals;
- bundles;
- free delivery;
- loyalty rewards;
- affiliate commission;
- wholesale pricing;
your normal selling price needs enough room to support them.
A product that is profitable at full price may become unprofitable after a discount and postage contribution.
Before launching an offer, calculate what remains.
Do not run discounts simply because sales feel slow.
Every promotion should have a job.
Bundles must still be profitable
Bundles can increase average order value and help customers choose.
They can also hide poor margins.
Calculate the cost of the full bundle, including:
- every product;
- bundle packaging;
- discount;
- picking and packing time;
- increased parcel size or weight;
- payment fees.
A bundle should feel valuable to the customer without becoming expensive work for the business.
Wholesale needs a separate calculation
Wholesale prices are usually lower than retail prices, but your costs do not disappear.
Before accepting wholesale, consider:
- product cost;
- labour;
- wholesale packaging;
- labels;
- order preparation;
- minimum quantities;
- payment terms;
- delivery;
- retailer margin;
- your capacity.
Do not divide the retail price in half and hope for the best.
A product that works at retail may not leave enough margin for wholesale.
Review prices when costs change
Prices should not be set once and forgotten.
Review them when:
- wax prices increase;
- fragrance oil costs change;
- packaging becomes more expensive;
- payment fees change;
- wages increase;
- the business becomes VAT registered;
- the product takes longer to make than expected;
- discounts become more frequent;
- postage costs change.
Small cost increases across several areas can quietly reduce the margin.
You do not need to change prices every week, but you do need a regular review.
Stop apologising for charging properly
Many small business owners feel guilty about prices.
They think:
- I only work from home.
- I am still new.
- It is only wax.
- Other sellers are cheaper.
- Customers will not pay more.
Working from home does not make the work free.
Being new does not remove the cost of materials, safety, packaging and time.
A sustainable price is not unfair to customers.
It allows you to maintain quality, provide reliable service and remain in business.
The alternative is often an exhausted owner working constantly for very little.
What to do if the correct price feels too high
If your calculation produces a price the market is unlikely to accept, do not immediately remove your wage or profit.
Review the business model.
Ask:
- Can materials be sourced more efficiently?
- Is packaging too expensive?
- Does the product take too long to make?
- Is the product too large?
- Is there too much waste?
- Are supplier quantities sensible?
- Does the product need a different format?
- Is the business targeting the wrong customer?
- Does the product earn its place?
Sometimes the product should change.
Sometimes the target customer or positioning needs to change.
Sometimes the product simply does not make commercial sense.
The answer is not always to charge less.
Review your whole range
Choose several products and calculate:
- real unit cost;
- selling price;
- unit profit;
- profit margin;
- production time;
- monthly sales;
- repeat purchase rate.
Mark each product:
- keep;
- review;
- stop.
A large range can hide weak products.
A smaller range of profitable, dependable sellers may support the business far better.
Price for the business you want to build
Your price affects more than today’s order.
It affects whether you can:
- reorder stock;
- pay yourself;
- survive quiet months;
- invest in marketing;
- replace equipment;
- offer sensible promotions;
- grow without constant financial pressure.
Do not price simply to attract an order.
Price to create a business capable of fulfilling that order properly and continuing afterwards.
Frequently Asked Questions About Wax Melt Pricing
What is a good profit margin for wax melts?
There is no universal margin that suits every business. Your target must reflect your costs, prices, sales volume, customer, tax position and growth plans. The key is to calculate the margin accurately rather than guessing.
Should I include my time when pricing wax melts?
Yes. Making, cleaning, labelling, listing, packing and administering orders all take time. Even when you are not yet drawing a full wage, you need to understand whether the product could eventually support one.
How do discounts affect wax melt profit?
A discount reduces the amount left to cover your costs and profit. Calculate the result before launching an offer, especially when combining discounts with free delivery, loyalty rewards or bundle pricing.
Should all my wax melts have the same price?
Products with similar sizes and costs can share a price, but do not assume every product costs the same to make. Packaging, fragrance cost, production time and waste may vary.
How often should I review my prices?
Review them regularly and whenever materials, packaging, postage, fees, wages or tax obligations change. You should also review any product that sells well but leaves surprisingly little cash behind.
Calculate your prices
The Wax Room Pricing and Profit Calculator includes fields for:
- materials;
- labour;
- overheads;
- waste;
- payment fees;
- postage contribution;
- VAT;
- discounts;
- target margin;
- expected monthly profit.
Download the Wax Room Pricing and Profit Calculator
For the full guide to pricing, profit, cash flow, stock, products and growth, read The Wax Room.
Discover The Wax Room Wax Melt Business Guide
About Emma
Emma Mawhinney is the founder of Chandlers Wax Melts and author of The Wax Room. She has built the business through more than 30,000 orders and £600,000+ in sales over six years.