Dealing with Sunk Costs in Your Soap or Candle Business
Every maker reaches a point where a business choice needs reconsideration. Maybe it's a fragrance oil that never quite became a bestseller, or packaging purchased in bulk that's collecting dust. These are examples of sunk costs, money, time, or resources already spent that can't be recovered.
Understanding this term is critical to making clear-headed business decisions. Sunk costs are not future investments or recoverable assets. They're the tools, materials, or hours already poured into a project or product. While they reflect effort and intention, they shouldn't influence the next step forward.
In a soap or candle business, this might look like continuing to produce a bar that doesn’t sell or holding onto branding that no longer connects with customers. Recognizing sunk costs allows you to approach decisions with clarity. The sunk cost fallacy is the belief that because you've already invested in something, you should keep investing to justify that original decision. In small maker businesses, this thinking often leads to clinging to underperforming ideas or inventory.
Picture launching a new candle scent that doesn’t generate much interest. Instead of moving on, you might pour more money into marketing, new labels, or bundled sets. The urge to make it "worth it" grows stronger. But continuing simply due to previous investments isn't sound business practice, it’s emotional decision-making disguised as strategy.
This fallacy often ties into a deeper desire to avoid waste, but ironically, it leads to more loss. Better decisions begin by accepting what’s already gone and focusing only on what's still within your control. Small businesses built with passion face unique traps. A maker might spend hours designing a product label, only to find that customers aren't responding. The temptation is strong to keep using the design to “make it work,” even if it’s not converting.
Holding onto slow-moving inventory in hopes that it eventually sells is another example. Makers often rationalize that the next market or promotion will turn things around, when the evidence says otherwise.
Then there's the mental and emotional attachment. Time invested in product development, branding, or photography builds a sense of ownership. Letting go feels personal, even when it’s just business. The more emotionally connected you are, the harder it becomes to assess the situation objectively.
Recognizing these traps is a key part of growth. Objectivity in business decisions helps keep momentum strong and opportunities open. Start by treating each decision on its own merit. Ask yourself: if I hadn't spent anything yet, would I still choose this option today? If the answer is no, it's likely the sunk cost fallacy is creeping in.
Shift focus to potential gains instead of past losses. Consider your current goals, market response, and future return. Evaluating a product based on its future value, not previous investment, leads to better outcomes.
Build a habit of regular review. Every few months, analyze which products are performing and which aren’t. Use data to guide these decisions, not emotion or assumptions. Let results, not effort, determine your next steps.
WSP offers resources designed to help makers evaluate product performance and learn when to pivot. These tools can bring structure to what otherwise feels like a personal decision. Imagine investing in a line of botanical wax melts. The idea seemed solid. You ordered custom molds, bought natural colorants, and spent weeks testing formulas. But six months later, the products still sit on shelves.
In this situation, the natural instinct might be to keep trying. Maybe a new name, a bigger discount, or another photo shoot will finally connect with customers. The problem is, each new investment digs the hole deeper.
Instead, consider cutting the line. Evaluate what sold, what didn’t, and redirect your energy to products with proven traction. Perhaps another scent family outperforms across the board. Doubling down on those may bring higher returns with less risk.
Letting go of the wax melts doesn’t erase the time or money spent. It acknowledges that not all ideas work out, and that’s part of building a business with longevity.
A sunk cost is already gone. An opportunity cost is what you miss out on when choosing one path over another. The distinction matters because good decisions prioritize where you're going, not where you've been.
If you continue to produce a soap line that rarely sells, that time, energy, and shelf space can’t be used on a product that's gaining traction. You’re not just investing in a weak product, you’re losing out on growth elsewhere.
Great business decisions come when you weigh options based on future impact. Reinvesting profits into top sellers, refreshing packaging based on trend data, or expanding a customer favorite will almost always deliver better outcomes than sticking with a poor performer. Running a maker business means constant decision-making. Some choices pay off. Others don’t. That’s part of the process.
The key is to stay aware of why you’re holding onto something. If it’s out of habit, emotion, or guilt over past effort, pause. Reframe the situation. Ask what brings value going forward.
You are not your products. You’re the creator behind them, and your adaptability is the most powerful asset in your business. Sunk costs are real, but so is your ability to pivot, evolve, and grow stronger each time.
Explore WSP’s business education tools and stay ahead with resources that support better decisions. Growth doesn’t come from clinging to what’s lost. It comes through what you choose to do next.
Understanding this term is critical to making clear-headed business decisions. Sunk costs are not future investments or recoverable assets. They're the tools, materials, or hours already poured into a project or product. While they reflect effort and intention, they shouldn't influence the next step forward.
In a soap or candle business, this might look like continuing to produce a bar that doesn’t sell or holding onto branding that no longer connects with customers. Recognizing sunk costs allows you to approach decisions with clarity. The sunk cost fallacy is the belief that because you've already invested in something, you should keep investing to justify that original decision. In small maker businesses, this thinking often leads to clinging to underperforming ideas or inventory.
Picture launching a new candle scent that doesn’t generate much interest. Instead of moving on, you might pour more money into marketing, new labels, or bundled sets. The urge to make it "worth it" grows stronger. But continuing simply due to previous investments isn't sound business practice, it’s emotional decision-making disguised as strategy.
This fallacy often ties into a deeper desire to avoid waste, but ironically, it leads to more loss. Better decisions begin by accepting what’s already gone and focusing only on what's still within your control. Small businesses built with passion face unique traps. A maker might spend hours designing a product label, only to find that customers aren't responding. The temptation is strong to keep using the design to “make it work,” even if it’s not converting.
Holding onto slow-moving inventory in hopes that it eventually sells is another example. Makers often rationalize that the next market or promotion will turn things around, when the evidence says otherwise.
Then there's the mental and emotional attachment. Time invested in product development, branding, or photography builds a sense of ownership. Letting go feels personal, even when it’s just business. The more emotionally connected you are, the harder it becomes to assess the situation objectively.
Recognizing these traps is a key part of growth. Objectivity in business decisions helps keep momentum strong and opportunities open. Start by treating each decision on its own merit. Ask yourself: if I hadn't spent anything yet, would I still choose this option today? If the answer is no, it's likely the sunk cost fallacy is creeping in.
Shift focus to potential gains instead of past losses. Consider your current goals, market response, and future return. Evaluating a product based on its future value, not previous investment, leads to better outcomes.
Build a habit of regular review. Every few months, analyze which products are performing and which aren’t. Use data to guide these decisions, not emotion or assumptions. Let results, not effort, determine your next steps.
WSP offers resources designed to help makers evaluate product performance and learn when to pivot. These tools can bring structure to what otherwise feels like a personal decision. Imagine investing in a line of botanical wax melts. The idea seemed solid. You ordered custom molds, bought natural colorants, and spent weeks testing formulas. But six months later, the products still sit on shelves.
In this situation, the natural instinct might be to keep trying. Maybe a new name, a bigger discount, or another photo shoot will finally connect with customers. The problem is, each new investment digs the hole deeper.
Instead, consider cutting the line. Evaluate what sold, what didn’t, and redirect your energy to products with proven traction. Perhaps another scent family outperforms across the board. Doubling down on those may bring higher returns with less risk.
Letting go of the wax melts doesn’t erase the time or money spent. It acknowledges that not all ideas work out, and that’s part of building a business with longevity.
A sunk cost is already gone. An opportunity cost is what you miss out on when choosing one path over another. The distinction matters because good decisions prioritize where you're going, not where you've been.
If you continue to produce a soap line that rarely sells, that time, energy, and shelf space can’t be used on a product that's gaining traction. You’re not just investing in a weak product, you’re losing out on growth elsewhere.
Great business decisions come when you weigh options based on future impact. Reinvesting profits into top sellers, refreshing packaging based on trend data, or expanding a customer favorite will almost always deliver better outcomes than sticking with a poor performer. Running a maker business means constant decision-making. Some choices pay off. Others don’t. That’s part of the process.
The key is to stay aware of why you’re holding onto something. If it’s out of habit, emotion, or guilt over past effort, pause. Reframe the situation. Ask what brings value going forward.
You are not your products. You’re the creator behind them, and your adaptability is the most powerful asset in your business. Sunk costs are real, but so is your ability to pivot, evolve, and grow stronger each time.
Explore WSP’s business education tools and stay ahead with resources that support better decisions. Growth doesn’t come from clinging to what’s lost. It comes through what you choose to do next.
