To price handmade products, add up your materials, your labor, and a share of your overhead, then add profit on top. A common rule of thumb is to double that cost for a wholesale price, then double it again for retail. If you sell on a platform like Etsy, check that your price still leaves room after fees.
This post is educational and is not financial or tax advice.
The handmade pricing formula
Here is the basic formula most makers start with:
Materials + Labor + Overhead = Cost
Cost + Profit = Price
Let’s go through each part.
Materials: everything that goes into one item
Count every supply used for a single item, not just the main ones. For a candle, that means wax, wick, fragrance, jar, label, and the box it ships in. For a blanket, it means yarn, but also tags and the bag.
If you buy in bulk, divide. A $20 bag of wax that makes 12 candles is $1.67 of wax per candle.
Labor: pay yourself an hourly rate
This is the part makers skip most often. Choose an hourly rate for your time and use it every time. Then time yourself making a batch and divide by the number of items.
If you are not sure what hourly rate to use, think about what you would need to earn to make the work worth your evening. Our free Handmade Pricing Calculator lets you try different rates and see how the price changes.
Overhead: the costs that keep the lights on
Overhead is anything you pay for that is not tied to one item: tools, website or app subscriptions, booth fees, packaging supplies, and a bit of your electricity. Add up a month of overhead and divide it by how many items you usually sell in a month.
Profit: the money your business keeps
Your labor pays you. Profit pays the business, so it can buy better tools, try new products, or cover a slow month. Many makers add a percentage, like 20% to 30% of cost. There is no single right number. Choose one you are comfortable with and adjust as you learn what sells.
Wholesale vs retail pricing
If you ever want to sell to shops, you need two prices.
- Wholesale price: what a store pays you. A common rule of thumb is cost × 2.
- Retail price: what a shopper pays. A common rule of thumb is wholesale × 2.
The reason for the second doubling is that shops need to mark up your item to pay their own rent and staff. If your retail price is too low, you can never offer wholesale without losing money.
The 2x/2x rule is a starting point, not a law. It works well for items with low labor, like candles, soap, or small jewelry. It gets tricky for items that take many hours, which we will see in the crochet example below.
Don’t forget platform fees
Selling online has its own costs. On Etsy in the US, the main fees on each sale are:
| Etsy fee | Amount | Charged on |
|---|---|---|
| Listing fee | $0.20 per listing | Each listing, lasts 4 months |
| Transaction fee | 6.5% | Item price plus shipping and gift wrap |
| Payment processing (US) | 3% + $0.25 | Total order amount |
Sources: Etsy Fee Basics and Etsy payment processing fees. Etsy’s payment processing fee also applies to any sales tax on the order, and some sales may come with an Offsite Ads fee. Our full Etsy fees guide covers those details.
Worked example 1: how much to charge for a candle
Let’s say you make 8 oz soy candles in batches of 12. Your numbers will be different, but here is how the math works.
Materials per candle
| Item | Cost |
|---|---|
| Wax | $1.60 |
| Wick | $0.15 |
| Fragrance oil | $1.20 |
| Jar and lid | $1.75 |
| Label | $0.25 |
| Box and padding | $0.50 |
| Total materials | $5.45 |
Labor: A batch of 12 takes 2 hours. At $20 an hour, that is $40 ÷ 12 = $3.33 per candle.
Overhead: $30 a month in tools and subscriptions, and you sell about 40 candles a month. $30 ÷ 40 = $0.75 per candle.
Cost: $5.45 + $3.33 + $0.75 = $9.53
Using the 2x/2x rule:
- Wholesale: $9.53 × 2 = $19.06, round to $19
- Retail: $19.06 × 2 = $38.12, round to $38
What you keep on Etsy. A buyer orders one candle at $38 and pays $6 for shipping, so the order total is $44.
- Transaction fee: $44 × 6.5% = $2.86
- Payment processing: ($44 × 3%) + $0.25 = $1.32 + $0.25 = $1.57
- Listing fee: $0.20
- Total Etsy fees: $4.63
$44 − $4.63 = $39.37. Take out the $6 you spend on the shipping label and you have $33.37. Subtract your $9.53 cost, and $23.84 is left as profit on top of the $3.33 you already paid yourself for labor.
Worked example 2: how much to charge for a crochet blanket
Blankets are where many crocheters get stuck, because the time adds up fast.
- Materials: 8 skeins of yarn at $7 each = $56
- Labor: 25 hours at $15 an hour = $375
- Overhead: tags, bag, and tool wear, about $5
- Cost: $56 + $375 + $5 = $436
Now try the 2x/2x rule: $436 × 2 = $872 wholesale, and $872 × 2 = $1,744 retail. That is very hard to sell for most blankets.
This is why many makers of time-heavy pieces do not sell them wholesale. Instead, they sell direct and use cost + profit:
- Profit at 20%: $436 × 0.20 = $87.20
- Price before fees: $436 + $87.20 = $523.20
Now cover the Etsy fees. If you list the blanket at $523.20 and fees come out of that, you lose part of your profit. Etsy’s transaction fee and processing fee together take about 9.5% of the order total, plus $0.45 in fixed fees ($0.25 processing and $0.20 listing).
Say you charge $15 for shipping and the label costs you $15. To keep $523.20 after fees, the price works out to about $580. Here is the check:
- Order total: $580 + $15 = $595
- Transaction fee: $595 × 6.5% = $38.68
- Payment processing: ($595 × 3%) + $0.25 = $17.85 + $0.25 = $18.10
- Listing fee: $0.20
- Total fees: $56.98
- You keep: $595 − $56.98 − $15 label = $523.02
That is right at your target. If $580 feels high for your market, you have options: offer a baby blanket or throw that takes fewer hours, use a faster stitch, or sell patterns alongside finished pieces.
Tips for pricing handmade items with confidence
- Price the same way every time. A consistent formula keeps you from guessing.
- Look at the market after you run the math, not before. If others charge less, find out why before you cut your price.
- Recheck your costs every few months. Supply prices change.
- Track every sale and supply purchase. Our Handmade Pricing & Inventory Sheet keeps your costs, prices, and stock in one Google Sheet.
A fair price pays for your materials, pays you for your time, and leaves something for the business. Once you know your numbers, it gets much easier to say your price out loud.