When we started Garsnett Beacon Candle Co. at our kitchen table during the pandemic, I had no idea if we were actually making money. Candles were selling and our bank account went up and down. But if you had asked me point blank, "What does it cost to make that candle, and how much of the sale price do you keep?" I would have given you a shrug and a guess, and that guessing cost us more than I want to admit.

The single biggest shift from hobby to real business was not a new scent or a bigger wax melter. It was learning to read our own numbers. Once we grew to 160 plus wholesale accounts and multiple brick and mortar stores here in Holland, Michigan, the numbers were the only thing that kept us from working hard and going broke at the same time. So today I want to walk you through the exact numbers we check every month. If you are learning how to start a candle business, this is the boring stuff nobody films for social media, and it is the difference between a brand that lasts and one that quietly disappears.

1. Cost of goods per candle (COGS)

This is the number everything else is built on, and it is the one most new makers get wrong. Your COGS is the total cost of everything that physically goes into one finished candle: wax, fragrance oil, wick, vessel, warning label, product label, box or packaging, and the dust cover if you use one. For our standard 9 ounce candle, our fully loaded cost lands somewhere around 4 to 5 dollars depending on the fragrance and the vessel we chose that season.

Here is the mistake I made for a full year: I only counted wax and fragrance. I forgot the vessel, the labels, and the box. When I finally added it all up, our "cheap" candle cost almost double what I thought. If you track one number this month, make it this one. Our free candle calculators will do the math for you so you are not doing it on a napkin like I was.

2. Gross profit margin

Once you know your true COGS, gross margin tells you how much of each sale you actually keep before overhead. The formula is simple: take your sale price, subtract your COGS, then divide by the sale price. If that 9 ounce candle costs us 4.50 to make and retails for 28 dollars, our gross margin is a little over 80 percent on retail. On wholesale, where that same candle sells for 14 dollars, the margin drops to around 68 percent.

Wholesale is still very profitable, but it is a different margin, and you have to know both before you agree to a big order. Early on we almost took a huge wholesale deal that would have crushed us because I was looking at retail margins in my head. Know your margin per channel, not one blended guess.

3. Average order value (AOV)

AOV is your total revenue divided by your number of orders, and it quietly controls your whole business. When our AOV was stuck around 30 dollars, every sale barely covered the hassle of packing and shipping. The month we started offering bundles and gift sets, our AOV climbed toward 55 dollars and the same amount of work made a lot more sense.

You do not grow AOV by raising prices and hoping. You grow it by making it easy to buy more at once: a three candle set, a candle plus a matching wax melt, a build your own bundle option. Watch this number every month and you will feel the effect on your bottom line fast.

4. Repeat customer rate

New customers are expensive. Repeat customers are where the real profit lives, because you already paid to acquire them once. Every month I look at what percent of our orders came from people who had bought before. When that number is healthy, above roughly 30 percent for us, I sleep well. When it drops, it is an early warning that our follow up and our product quality need attention.

Candles are a perfect repeat product because they burn down and get used up. If your repeat rate is low, you are leaking money out the back door while pouring it in the front. A simple email flow and a reminder when their candle is running low did more for this number than any ad ever did for us.

5. Cash on hand and runway

Profit on paper and cash in the bank are not the same thing, and that gap has scared me more than once. You can have a great month on paper and still be short on cash because you just bought 500 vessels and a pallet of wax. Every month I look at how much cash we have and roughly how many months of expenses that covers. That is your runway.

This matters most in the fall, because a candle business spends heavily in the third quarter to be ready for the fourth quarter rush. If you do not watch your cash, you can sell out at Christmas and still not have the money to buy supplies for the January reorders. Respect cash flow and it will keep you out of the scariest hole a growing maker can fall into.

6. Revenue by sales channel

The last number I check is where the money actually came from: our website, wholesale, craft markets, or our retail stores. It tells me where to spend my limited time next month. There were seasons where wholesale quietly became half our revenue while I was still spending most of my energy on single online orders. The numbers told me to shift, and shifting is what let us keep growing. If wholesale is still a mystery to you, our Wholesale 101 guide breaks down how we built those accounts.

How to actually do this without hating it

You do not need fancy accounting software to start. For our first year I used a plain spreadsheet and thirty minutes on the first Sunday of every month. As we grew, we moved our inventory and cost tracking into Makers Manager so the COGS updated automatically every time supply prices changed. Pick whatever you will actually keep up with, because the best system is the one you use.

Here is the mindset shift that changed everything for me. Checking your numbers is not about being good at math. It is about respecting your own hard work enough to know whether it is paying off. A candle business can support you full time, but only if you can see clearly what is working. If you want the full roadmap from your first pour to a real brand, start with our free 10 step guide to starting a candle business, and come hang out in our free Facebook community where makers share these wins and hard lessons every day.

Block thirty minutes this weekend and check these six numbers. Do it every month for a year and you will run a completely different business than the one you run today. We did, and it is the reason we are still here.