Guide · Pricing
How to price handmade products
Most makers price by looking at what others charge, then knock a bit off. That's how you end up busy and broke. Price from what each item really costs you, including your time, and check the market second.
The formula
Materials + labor + overhead = cost
Cost × 2 = wholesale price
Wholesale × 2 = retail price
- Materials: everything that goes into one item, including packaging, labels and the box it ships in.
- Labor: the time one item takes, at an hourly rate you'd accept as a wage. Minutes ÷ 60 × your rate.
- Overhead: what you spend running the business that isn't in one item: tools, studio rent, electricity, software, photography. A simple way is to add 10–20% of materials and labor.
Why double twice? Wholesale has to cover your cost and leave a profit. Retail has to leave room for shops that stock you to make their own margin, so that selling direct never undercuts them.
Three worked examples
| Item | Materials | Time | Cost | Wholesale | Retail |
|---|---|---|---|---|---|
| Soy candle (25 min, $20/hr, 10% overhead) | $4.80 | 25 min | $14.45 | $28.89 | $57.78 |
| Brass earrings (40 min, $25/hr, 10%) | $3.10 | 40 min | $21.74 | $43.49 | $86.98 |
| Thrown mug (90 min, $22/hr, 15%) | $6.50 | 90 min | $45.43 | $90.85 | $181.70 |
Worked out with the Handmade Pricing Calculator, which also shows what you'd keep after Etsy's fees: $51.84 on the candle at $57.78.
"That's more than anyone pays for a candle"
Often the formula's first answer is higher than the market. Don't fix that by cutting your hourly rate. Look at time first.
Pour candles in batches of 12 over two hours and each one takes 10 minutes, not 25. The same candle then costs $8.95 to make, with a wholesale price of $17.89 and a retail price of $35.78, much closer to what candles sell for, and you're still paid $20 an hour.
Other honest levers: cheaper materials bought in bulk, a simpler design, or a smaller size at a lower price point. If none of them work, the product may make a better hobby than a business, and it's better to learn that before a holiday rush.
Selling only direct?
If you'll never sell wholesale, you can price below the formula's retail price, but never below the wholesale price. Below wholesale, each sale pays you less than your own hourly rate once fees come out. On Etsy, a typical sale loses about 10% to fees, and around 25% when it comes from an Offsite Ad (see Etsy fees in 2026).
Check it every few months
- Material costs creep up. Re-run your prices when a supplier raises theirs.
- You get faster. Time each item again; your labor cost may have dropped, or your hourly rate can go up.
- Fees change. Marketplaces adjust fees a few times a year.