How to Price Your Handcrafted Products for Profit {without the guesswork}.
Pricing your handmade products can feel overwhelming—especially when you're just starting your business. You want to make sure your work is valued, you’re getting paid for your time, and you're not losing money. But what’s the “right” price?
In this blog post, we’ll walk through a simple and flexible formula to help you price your craft products, kits, or handmade items. It’s not about strict rules, but about understanding the real cost of what you’re offering—so you can feel confident and make a profit doing what you love.
Why Pricing Matters for Creatives
Many creatives undercharge—especially in the early stages of business. But when you price too low:
You're not getting paid for your time
Your business can’t grow or sustain itself
Your customers may undervalue your work
You can start to feel resentful about your business, your customers, and your artwork.
Fair pricing is about sustainability, not greed. You deserve to be paid well for your skills, time, and creativity.
The Basic Pricing Formula for Handmade Products
There are no one-size fits all rules for this, which sadly means that it might be a big harder than I’m sharing here. But if you start with an understanding of some formulas as the basis of your pricing strategy, then it can become easier as you move forward and become more experienced with your audience, market, and even the cost and time to make your products.
Please note that it’s much more nuanced than this. This formula is based more on products, rather than the x-factor of artwork. But having this in mind can be a very useful guide.
Here’s a simple formula you can use to calculate the base cost of each product:
A + B + C + D = E
Where:
A = Cost of materials
B = Cost of packaging/extras
C = Your time (labour)
D = Overheads (like website fees, payment processing fees, electricity, studio or equipment hure)
E = Your Base Cost
Let’s break these down.
1. Cost of Materials (A)
Gather the receipts for everything you’re using to make your product. From the thread, scraps of fabric, second-hand zips and doilies, to the paper, clay, paint, or earring wire.
You’re likely making things in bulk - even if this is 10 or something, rather than 100. So, add up all the costs and divide by the number of final products made.
Even if you already have supplies in your stash, or you purchased them second-hand, ask yourself What would it cost to replace them today, full price and new?
This helps you set sustainable prices—even if you found a bargain at the op shop.
2. Packaging and Extras (B)
Think about:
Tissue paper
Twine or string
Printed instructions
Labels or stickers
Gift wrapping
Business cards or thank you slips
These little things add up, and they should be included in your pricing. Even if you’re printing and stamping the cards yourself (oh, yes - I’ve done that) it still costs you money for ink and paper.
3. Your Time (C)
Time yourself making 10-20 of your products or packing fabric kits. If you work in batches over multiple days (such as working with clay, dyed fabric, or paint) then you can write a timesheet to keep track of it all.
Consider:
Cutting wire, sanding stones for your jewellery
Pulling handles, wedging your clay
Measuring out your yarn
Setting up a dye pot or even gathering the materials - the time spent foraging for dye stuffs should still be included in your timesheet
Cutting paper
Prepping your canvas
Ironing, prepping, cutting and sewing fabric
Curating pieces
Assembling instructions
Tying ribbons or adding finishing touches
Think about what you’d pay someone else to do this. If you’re not getting paid, your business isn’t sustainable.
C = $hourly rate x time spent (ie $30 x 1.5 = $45)
🧵 Tip: You might like to look at different processes of the jobs you do and allocate if some are more ‘manual labour’ while others are more ‘artist’ based. And decide if you’d pay yourself a different rate depending on the skill or talent level.
4. Overheads (D)
This includes:
Website hosting
Studio space (if any)
Internet and electricity
Credit card/PayPal fees
Software or design tools
Perhaps petrol if you have to drive a lot (ie a photographer who shoots on location, or having to take your pottery to a kiln somewhere else to fire).
Even if it’s tricky to calculate exactly, adding an estimate ensures these real costs aren’t ignored.
You might add these figures up over 3-months, then divide by the amount of products you made during that time.
Example Base Cost Calculation
Let’s say:
A (Materials) = $10
B (Packaging) = $3
C (Time) = $10
D (Overheads) = $2
Base Cost (E) = $25
This is basically the price to make your product and get it in front of your audience. So, without this $25 you can’t make a single thing. But if you only charged $25 (E) to your customer you wouldn’t be putting money into your business to help it grow. You’d always only have enough to make another batch of the same products, no extra money to test new things, or invest in new tools. And you’d only be paying yourself that one base set price (very specific time that you factored into the making of this product only), and not give yourself a bonus, or even sick pay.
Which is why you need to consider the important part of making some profit for your business. Profit is basically the actual money in your business (bank account, pocket) after you’ve paid for all your materials, costs, packaging, web site fees, and yourself for the manual hours (or someone else if you outsource any of the processes).
Without profit then this isn’t a business, it’s simply a hobby that is only giving you just enough funds to buy more materials for the exact next make.
Add Profit: Your Actual Price to Sell
Once you’ve got your base cost, you need to add profit—this is what allows you to grow and reinvest in your business. And pay yourself properly - even though you counted ‘time’ in your costs, we both know, that there are a LOT of other things that are hard to correctly time and put a price on. Many things also don’t fit into the ‘cost of goods’ (E), such as answering emails, contacting wholesalers, the time at a market, or updating your website. Without profit you’re not going anywhere near to paying yourself for these things.
Choose a Profit Margin
Most small product businesses add 50%–100% markup:
50% profit = $25 + 50% = $37.50
100% profit = $25 + 100% = $50
💡 Choose a markup that feels fair to you and makes sense for your audience, and don’t feel like you can only use one or the other for all your products.
There is no one exact mark-up to use. Different products might have different markups. If it makes more sense for something to fit into a specific price range then work with that. You might find that a higher profit margin on one piece of work counteracts a lower margin on something else. But keep track of if they are actually balancing each other out.
If you’re selling a lot of the lower profit product, rather than the higher profit, then you need to reassess things and change up the pricing a bit.
Let’s call this F = Wholesale Price
So in this case, F = $37.50
Retail Pricing and Wholesale
If you want to sell your kits in stores or galleries, you need to consider retail markup.
Most retailers add 100% markup minimum:
Wholesale price: $37.50
Retail price: $75.00
Even if you're not planning to wholesale now, it’s smart to price in a way that leaves you room for it later. I always like to think that selling at retail - or perhaps somewhere in between wholesale and retail if you know you’ll never retail your work - that it gives you a slightly higher income (profit).
Consider this maths:
Base cost = $25
Wholesale (w/s) 50% = $37.50. This means you’ve made $12.50 profit on this one product.
If you sell (on your own website or market stall) at Retail 100% of w/s = $75. This means you’ve now made $12.50 + $37.50 = $50 profit for your business (compared to only $12.50).
🧵 Tip: Always sell at your retail price, even at markets or on your own website. You can offer perks like free shipping or a gift with purchase, but don’t undercut your retail partners.
Try this simple pricing calculator
Want help figuring out your own pricing? Give this calculator a go:
Product Pricing Calculator
A = Materials: _______
B = Packaging: _______
C = Your Time (as a $ amount): _______
D = Overheads: _______
E = A + B + C + D = _______
Profit Margin: ___%
Wholesale Price = E + Profit (E x % + E) = _______
Retail Price = Wholesale x 2 = _______
Final Thoughts on Pricing Handmade Products
There’s no perfect formula. But having a structure helps you price from a place of confidence rather than guesswork. Remember:
You deserve to get paid well.
Pricing is part strategy, part intuition.
You can always refine later as you learn more.
Take these tips and calculator and see what looks good when you get to a wholesale or retail price. Are you happy to earn that much money for this piece, to sell it at that price. Does it seem outrageously too expensive (perhaps your material costs are too high, or you take a bit too long to make your products), or is it much cheaper than other creatives in your field.
While you shouldn’t price entirely on what someone else sells you, it’s good to look around and see where you fit in. Can the market sustain your pricing, can you move into a different audience bracket by raising your prices a little? Could you sell more products if you lowered the price, while still having a viable profit margin?
One last, and I think super important tip, is to remember that you are very possibly not your target audience.
By this I mean, don’t price something based on how much you’d pay. Someone told me this in my very early days of my business and it’s stuck with me (along with - friends and family shouldn’t ask for a discount. You by all means can give one, but they should be supporting your business because they want to see you flourish and succeed, not get lower priced products).
I don’t think us artists and creatives are great at seeing the true value of something - the “oh I could make that”, or “but it’s only second-hand materials”, or “I made that in my spare time while watching my favourite show” isn’t how we should look at our creations and art work.
I suggest that you play around with different pricing amounts to see how it fits into your needs as a business owner, an artist and creative, and for your own ‘feels’ as a sales person. As mentioned above - the difference between selling at the base wholesale price (your sell price) compared to selling at the retail price is quite a big amount. Setting your price somewhere in between might feel good for you.
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Want More Creative Business Tips?
Check out these blog posts -
Multiple income streams for artists, crafters and designers
From Hobby to Income
Starting a new creative business - here’s where to begin.
