My Cheapest Supplier Frequently Runs Out of Stock — How Do I Assign a Financial Cost to Production Delays When Comparing Suppliers?
शेयर करना
Is the cheap supplier still cheaper? In this example, just: Supplier A at ₹450.00/kg with four outages a year has a true price of ₹510.29/kg; Supplier B at ₹500.00/kg with one outage a year, ₹515.07/kg. A saves ₹1,10,400.00 a year on the invoice and loses ₹99,840.00 of it to stock-outs: ₹10,560.00 a year, ₹0.88 a candle, is left. At five outages a year A costs more.
What should I actually do? Usually keep the cheap supplier and buy the buffer that is cheaper than the stock-out. Two weeks of A's wax (92 kg, ₹41,400.00 of cash) costs about ₹7,452.00 a year to hold at a 1.5% monthly cost of money and turns most outages into nothing worse than a reorder.
Is fragrance different? Yes: you cannot rush-buy your Lavender from another house, because their lavender is a different oil. An oil stock-out leaves you waiting or retesting, so your top oils deserve more cover than wax.
- Straight answer: price the outage, then compare
- The worked candle and the two suppliers
- What one stock-out really costs
- Price saving against stock-out cost
- The cheaper fix: buy the buffer, not the supplier
- Why a fragrance stock-out costs more than a wax one
- The test gate when an outage forces a substitute
- Materials to buffer, priced
- Frequently asked questions
The worked candle and the two suppliers
The candle is this series' default: a 184 g wax + 16 g fragrance fill (200 g at 8% of total weight). You make 1,000 a month over 25 production days, about 40 a day, so you use 184 kg of wax a month and 2,208 kg a year (worked example — use your own). Supplier A sells your wax at ₹450.00 a kg and runs out often; Supplier B sells a comparable wax at ₹500.00 a kg and runs out rarely. Neither price is a CSI price, and nothing here suggests either supplier is or is not CSI. The fragrance (Lavender at our 1 kg price), the wick (Eco C2) and the box (Corrugated Box 11 x 11 x 8 cm) are real CSI items; the jar is your own, at a worked ₹60.00.
| Component | Quantity | Price basis | Per candle | % of material cost |
|---|---|---|---|---|
| Wax (Supplier A) | 184 g | ₹450.00/kg — worked example | ₹82.80 | 32.1% |
| Fragrance (Lavender) | 16 g | CSI 1 kg ₹5,221.00 | ₹83.54 | 32.4% |
| Wick (Eco C2) | 1 | CSI ₹94.40 / 10 | ₹9.44 | 3.7% |
| Jar | 1 | your jar — worked example | ₹60.00 | 23.2% |
| Box (11 x 11 x 8 cm) | 1 | CSI ₹2,242.00 / 100 | ₹22.42 | 8.7% |
| Total | ₹258.20 | 100% |
Wax is 32.1% of this candle. Supplier A's lower price saves ₹9.20 a candle against B (₹258.20 against ₹267.40), ₹9,200.00 a month and ₹1,10,400.00 a year. That is the number the cheap supplier is selling you. The rest of this page is the number they are not printing.
What one stock-out really costs
Take one outage that leaves you without wax for 8 production days (worked example). At 40 candles a day that is 320 candles not made on time. What happens next depends on you and your customers, so cost it the way it would really play out, line by line.
| Line | How it is calculated | Cost per event | % of event |
|---|---|---|---|
| Lost orders | 320 delayed × 20% cancel or never place = 64 × ₹220.00 contribution | ₹14,080.00 | 42.3% |
| Goodwill on delayed orders | 256 kept × ₹25.00 (discount code or courier upgrade) | ₹6,400.00 | 19.2% |
| Idle labour | 2 people × 8 hours × 8 days × ₹100.00/hour, paid anyway | ₹12,800.00 | 38.5% |
| One stock-out | ₹33,280.00 | 100% |
Three things to notice. Lost contribution is the biggest line (42.3%), so your cancellation rate matters more than anything else on the page: a maker selling pre-ordered wedding favours loses almost nothing; a maker selling impulse Diwali gifts can lose most of the delayed orders. Idle labour only counts if you pay people who have nothing else to do; if your team switches to labelling, packing or making wax melts, cut it. And none of this includes the hardest line to price: the wholesale buyer who quietly moves to a maker who delivered on time. Leave it out of the arithmetic and keep it in mind.
The other routes, and why you must not add them
Waiting is one way through an outage. You might instead rush-buy the same wax in small packs from a retailer: 58.88 kg at a worked ₹620.00 a kg plus ₹1,500.00 of extra freight is ₹11,509.60, cheaper than waiting if the same wax really is on sale elsewhere (it often is not; many waxes are one supplier's own product). Or you might pour a different wax: a quick 9-candle confirmation test costs ₹2,370.38 in materials, and if a rushed substitute fails after release (a judgement 15% chance here) the expected rework and refunds on the 320 candles come to ₹15,273.60; ₹17,643.98 together. Cost each route, then use the one you would actually take. Adding the rush premium to the lost orders counts the same outage twice.
Price saving against stock-out cost
| Line | Supplier A | Supplier B |
|---|---|---|
| Wax price per kg | ₹450.00 | ₹500.00 |
| Outages a year (worked) | 4 | 1 |
| Expected stock-out cost a year | ₹1,33,120.00 | ₹33,280.00 |
| Stock-out cost per kg | ₹60.29 | ₹15.07 |
| True price per kg | ₹510.29 | ₹515.07 |
| Stock-out cost per candle | ₹11.09 | ₹2.77 |
A's invoice saves ₹1,10,400.00 a year. Its three extra outages cost ₹99,840.00. A is still ahead by ₹10,560.00 a year, ₹0.88 a candle: not nothing, but a fraction of the ₹9.20 a candle the price list promised. The break-even is about 4.32 outages a year: at five, A loses ₹22,720.00 a year against B. Put another way, at four outages against one, A's lead disappears once a single outage costs more than ₹36,800.00.
Sensitivity. The answer turns on the cancellation rate. If 40% of delayed orders are lost instead of 20%, one outage costs ₹45,760.00, and A's three extra outages cost ₹26,880.00 a year more than its lower price saves. If your customers are patient and your team has other work during an outage, A wins comfortably. That is why the log matters more than the formula.
The cheaper fix: buy the buffer, not the supplier
A buffer turns an outage into a holding cost. Two weeks of Supplier A's wax is 92 kg, ₹41,400.00 of cash on the shelf. At a worked 1.5% a month cost of money (overdraft interest, or what that cash would earn in the business; use your own), holding it costs ₹7,452.00 a year, ₹3.38 per kg used. If it absorbs three of A's four outages a year, A's true price falls to ₹468.45 a kg, and A with a buffer beats B without one by ₹1,02,948.00 a year (₹8.58 a candle). The buffer pays for itself if it averts just one outage every 4.5 years.
Why a fragrance stock-out costs more than a wax one
A wax outage has three routes: wait, rush-buy the same wax, or substitute. A fragrance outage has two: wait, or substitute a different oil, which is a new scent with its own load, wick behaviour and colour. Take a Lavender SKU selling 250 candles a month (worked example; 4 kg of oil). An 8-day Lavender outage, with your team moving to other scents so no labour is idle, costs about ₹5,120.00 in lost contribution and goodwill. One month of Lavender cover is ₹20,884.00 of cash and about ₹3,759.12 a year to hold at 1.5% a month: cheaper than a single outage. A replacement lavender from another house needs at least a 9-candle test (₹2,147.76 in materials at sample prices) and, if customers notice the difference, more than that. Whether an oil that smells almost identical can keep your wick and load is the almost-identical fragrance post.
| Wax outage | Fragrance outage | |
|---|---|---|
| Can you rush-buy the same material elsewhere? | Sometimes (if the wax is sold by others) | No: another supplier's oil is a different oil |
| Can you substitute? | Only with a test: a new wax is a reformulation | Only with a test, and the scent changes |
| Does production stop? | Yes, for every SKU | Only for that scent; labour can move |
| What to buffer | Two weeks (92 kg here) | About a month on your top two or three oils |
| Holding cost here | ₹7,452.00 a year | ₹3,759.12 a year for Lavender |
The asymmetry points one way: hold a little wax buffer for every SKU, and a deeper buffer only on the oils that carry your sales. Slow scents do not deserve a month of cover; the cash is better spent on the bestsellers. Asking a supplier about batch consistency and long-term availability for one oil is the same-fragrance-for-years post.
The test gate when an outage forces a substitute
The worst cost of a stock-out is not the delay; it is the untested substitute poured in a hurry and shipped. Every substitution, wax for wax, oil for oil, wick for wick, is a formulation change. Before any substitute reaches a customer:
| Situation | Minimum before selling | Where the method is |
|---|---|---|
| Same product, same supplier, new lot | Incoming check and one test candle | Approved-supplier list |
| Same wax name, different supplier | Full burn test: wick, throw, appearance | Changed only the wax supplier |
| Two materials out at once | Design the test so you can tell the effects apart | Wax and fragrance both out of stock |
| A large order and an approved material gone | Decide: substitute, part-produce or wait | 5,000-candle order, material unavailable |
Keep everything else identical while you test a substitute: same jar, same wick, same load, same cure time, same test room. If the substitute passes, record it as an approved alternative and you have, in effect, started a second source; if it fails, the outage cost you time but not customers. The cost of keeping a pre-approved backup on the shelf, and which materials deserve one, is the dual-sourcing post.
Materials to buffer, priced
Five items from the worked candle, at every listed pack on 4 October 2026. CSI publishes no throw or burn data, so nothing is ranked on performance; the order follows what an outage would stop first.
| Size | Price | Per gram | 200 g candles (184 g wax) | Wax per candle |
|---|---|---|---|---|
| 500 g | ₹260.00 | ₹0.52 | 2 | ₹95.68 |
| 1 kg | ₹507.40 | 0.5074 | 5 | ₹93.36 |
| 5 kg | ₹2,537.00 | 0.5074 | 27 | ₹93.36 |
| 10 kg | ₹5,074.00 | 0.5074 | 54 | ₹93.36 |
| Size | Price | Per gram | 200 g candles (184 g wax) |
|---|---|---|---|
| 500 g | ₹299.00 | 0.5980 | 2 |
| 1 kg | ₹599.00 | 0.5990 | 5 |
| 5 kg | ₹2,995.00 | 0.5990 | 27 |
| 10 kg | ₹5,999.00 | 0.5999 | 54 |
| Size | Price | Per gram | 200 g candles at 8% (16 g) | Oil per candle |
|---|---|---|---|---|
| 15 g | ₹105.02 | ₹7.00 | none (a sniff sample) | ₹112.02 |
| 50 g | ₹270.00 | ₹5.40 | 3 | ₹86.40 |
| 100 g | ₹540.00 | ₹5.40 | 6 | ₹86.40 |
| 500 g | ₹2,620.00 | ₹5.24 | 31 | ₹83.84 |
| 1 kg | ₹5,221.00 | ₹5.22 | 62 | ₹83.54 |
| Size | Price | Per gram | 200 g candles at 8% (16 g) | Oil per candle |
|---|---|---|---|---|
| 15 g | ₹93.22 | ₹6.21 | none (a sniff sample) | ₹99.43 |
| 50 g | ₹230.00 | ₹4.60 | 3 | ₹73.60 |
| 100 g | ₹390.00 | ₹3.90 | 6 | ₹62.40 |
| 500 g | ₹1,890.00 | ₹3.78 | 31 | ₹60.48 |
| 1 kg | ₹3,738.00 | ₹3.74 | 62 | ₹59.81 |
| Pack | Price | Per wick | Months of cover at 1,000 a month |
|---|---|---|---|
| Thick (C2) / 100 | ₹944.00 | ₹9.44 | a tenth |
| Thick (C2) / 500 | ₹4,720.00 | ₹9.44 | half |
| Thick (C2) / 1000 | ₹9,440.00 | ₹9.44 | one |
CandleMakingSuppliesIndia sells the wax, oils, wicks and boxes priced here, and does not sell finished candles. This page still tells you to stay with a cheaper supplier when a buffer covers their gaps, and that our own store had items out of stock on the day we checked.
Every CSI price was checked on the live store on 4 October 2026, per pack, with availability per size; nothing shown as buyable was out of stock that day. Product wording is quoted from the pages. CSI does not publish stock depth or lead times; ask on WhatsApp.
Both suppliers' prices, the outage length and frequency, the cancellation rate, contribution, goodwill, labour rate, rush price, cost of money and the substitution risk are labelled worked examples or judgement, never CSI figures. This is practical business judgement, not financial advice. For bulk pricing, GST invoicing, and MSDS and IFRA documentation on request, message us on WhatsApp at +91 7397976926.
Frequently asked questions
- My Candle COGS Is ₹250 and I Want It Below ₹200 — How Do I Set a Specific Savings Target for Each Raw-Material Component?
- At What Monthly Consumption Should I Ask My Wax and Fragrance Suppliers for Wholesale or Volume Pricing?
- A New Supplier Is 15% Cheaper — How Do I Calculate Whether Testing and Switching Costs Are Worth the Expected Annual Saving?
- My Existing Supplier Is Reliable but More Expensive — How Much Cheaper Should Another Supplier Be Before I Consider Switching?
- Should I Keep Two Approved Suppliers for Critical Candle Raw Materials Even If the Backup Supplier Costs Slightly More?
- A Supplier Offers Better Pricing but Requires a Much Larger MOQ — How Do I Compare Unit Savings Against Working Capital Locked in Inventory?
- I Can Save ₹1 Lakh a Year by Buying Larger Raw-Material Quantities — How Do I Decide Whether the Extra Inventory Risk Is Acceptable?
- How Do I Build a Continuous Candle Cost-Optimisation System Using BOM Analysis → Highest-Cost Component → Alternative CSI Raw Material → Controlled Testing → Cost-per-Saleable-Unit Comparison → Bulk Purchasing → Margin Improvement?
Customer reviews: The six reviews at the top of this page are genuine, published Judge.me reviews left by CSI customers on the product pages named on each card — Eco Candle Wicks, Eco Soy CSI 400, Lavender Fragrance Oil, Luxury Soy Wax CSI 464 (Flakes Form) For Container Candles, Luxury Soy Wax Chunks for Jar / Container Candles. They are general product reviews, not assessments of the cost-reduction advice on this page. Names, star ratings, dates and products are as recorded by Judge.me and wording is unedited. "Verified buyer" appears only on reviews Judge.me recorded as verified — Jaya Sawlani, Subhankar Roy, Monika Deep, Kaushiki Satarkar, Akansha, Arminder Kaur. Reviews below five stars are included as published, not filtered out.
Figures verified 4 October 2026, CSI live pricing: Luxury Soy Wax CSI 464 500 g ₹260.00, 1 kg ₹507.40, 5 kg ₹2,537.00, 10 kg ₹5,074.00; Luxury Soy Wax Chunks 500 g ₹299.00, 1 kg ₹599.00, 5 kg ₹2,995.00, 10 kg ₹5,999.00; Lavender Fragrance Oil 15 g ₹105.02, 50 g ₹270.00, 100 g ₹540.00, 500 g ₹2,620.00, 1 kg ₹5,221.00; Roasted Coffee Fragrance 15 g ₹93.22, 50 g ₹230.00, 100 g ₹390.00, 500 g ₹1,890.00, 1 kg ₹3,738.00; Eco Candle Wicks Thick (C2) 10 ₹94.40, 100 ₹944.00, 500 ₹4,720.00, 1,000 ₹9,440.00; Corrugated Box for Candle Packaging (11 x 11 x 8 cm) Pack of 100 ₹2,242.00. Every pack listed is in stock on 4 October 2026; out of stock that day: Soy Wax 464 Pellets (all sizes), Semi Refined Paraffin Wax, Sandalwood Fragrance Oil 15 g, 50 g and 100 g. Per unit = price ÷ grams or units, two decimals.
Non-price figures: the candle is 200 g at 8% of total weight (16 g oil + 184 g wax). Supplier A ₹450.00/kg and Supplier B ₹500.00/kg, 1,000 candles a month over 25 production days, 8 days lost per outage, 4 and 1 outages a year, 20% of delayed orders lost, ₹220.00 contribution, ₹25.00 goodwill, ₹100.00/hour for two people, the jar at ₹60.00, the rush price, the 15% substitution risk and the 1.5% monthly cost of money are worked examples or judgement. Costs exclude labour (except where costed as idle labour), freight, GST and marketing. Diwali 8 November 2026 is a calendar fact.