How to Price Handmade Products

Updated 2026-08-31 · ProfitKit

The common advice — "double your material cost" — is the reason so many handmade shops are busy and unprofitable. It leaves out the two largest real costs in handmade selling: your labour, and the platform's cut. Here is a method that includes both.

Step 1: price your time first, not last

Time out of your day, spent making something, is a cost even when you enjoy it. Pick an hourly figure you would accept for skilled work, time yourself honestly making one item — including setup and cleanup, which people always forget — and put the result in as a cost.

If an item takes 40 minutes at $15 an hour, that is $10 of labour. Not optional, not "profit" — a cost, exactly like the fabric.

Step 2: add every material, including the invisible ones

Fabric and thread are easy. The ones that get missed: packaging, tissue, the printed card, the label, the tape, the fraction of a tool that wears out. Individually trivial, collectively often $1–3 per item.

Step 3: build the price, then check the fees

A workable structure:

(Materials + Labour) × 2 = retail price

The doubling is not arbitrary profit — it covers the platform fee, payment processing, the packaging you forgot, returns, and the wholesale headroom you will want later. So for $6 of materials plus $10 of labour: $32 retail.

Then run $32 through the fee calculator with your real postage. That is the step that reveals whether the doubling was actually enough — on a fee-heavy platform with subsidised shipping, sometimes it is not.

Step 4: charge real postage

Weigh a finished, packed item and price the actual postage. Charging $5 when postage costs $7.40 loses $2.40 on every sale — and on Etsy you also pay the 6.5% transaction fee on the shipping you charged, per Etsy's fee documentation. Subsidised shipping is the single most common cause of a handmade shop that grows without earning.

On "my market won't pay that"

Sometimes true. But the honest response is to change the product — faster to make, better materials at a higher price point, or a different buyer — rather than to keep the price and absorb the gap out of your own unpaid hours. A price that requires you to work for free is not a price, it is a donation.

Do the calculation