How to use the pricing calculator
- Add up your materials for one finished item, including thread, hardware, glue and the share of a hide or fabric roll you use.
- Add packaging. Boxes, tissue, stickers, thank-you cards and tape add up quickly.
- Record your time honestly. Time the whole process, including cutting, assembly, finishing, photography and packing, and multiply by a fair hourly wage.
- Spread your overhead. Add up a month's fixed costs (tools, software, studio rent, electricity, subscriptions) and divide by the number of items you make in a month.
- Choose a method. The multiplier method gives wholesale and retail prices. The margin method gives a retail price that leaves your chosen profit after marketplace fees.
The two common pricing formulas
The multiplier formula is popular with makers who sell to shops as well as directly: cost × 2 = wholesale, and wholesale × 2 = retail. The first doubling gives you profit and room to grow. The second leaves room for a shop to make its own margin if it stocks your work. If you sell directly, the second doubling also pays for your marketplace fees, advertising, returns and the times you put on a sale. Some makers use 1.5–2.5 for each step, depending on their product and market.
The margin formula starts from the profit you want to keep: price = (cost + fixed fees) ÷ (1 − margin − fee %). For example, with a cost of 48, fixed fees of 0.45, fees of 10% and a 30% target margin, the price is 48.45 ÷ 0.60 = 80.75. This method is useful when you only sell retail and want to know your true floor.
Common pricing mistakes
- Not paying yourself. If labor is left out, every sale quietly pays you nothing for your time. Your price also cannot grow with your business, because hiring help later would make each item lose money.
- Copying the cheapest competitor. Their costs, quality and goals are not yours. Look at competitors to understand the range, then price from your own numbers.
- Ignoring fees. Marketplaces, payment processors and ads take a percentage of every sale. Our Etsy fee calculator shows the exact amounts.
- No room for sales. If a 20% discount wipes out your profit, your full price is probably too low. Test it with the sale and discount calculator.
When to adjust your price
Review your prices whenever material costs change, when you get faster at making something, or at least twice a year. If items sell out quickly and buyers rarely ask questions about price, that is often a sign you can charge more. If people view your items but rarely buy, look at your photos, descriptions and shipping costs before you cut the price.
Want the full explanation? Read our guide: How to price handmade products: a step-by-step guide.
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Frequently asked questions
What is a good profit margin for handmade products?
There is no single right number. Many small product businesses aim for a net margin somewhere in the 20–40% range after all costs, including paying themselves. Use the calculator to see what your own costs allow.
Should I include my time in the price?
Yes. Your hourly rate is a real cost of making the item. Leaving it out makes the business look profitable when it is really unpaid work.
What is the difference between markup and margin?
Markup is profit as a percentage of cost, and margin is profit as a percentage of the selling price. An item that costs 50 and sells for 100 has a 100% markup but a 50% margin.
How do I calculate overhead per item?
Add your monthly fixed costs, such as tools, software, rent and utilities, then divide by the number of items you typically make in a month.
Which currency does the calculator use?
Any currency. Enter every amount in the same currency and the results will be in that currency.