How do I price something handmade?

Total your materials, your labor (hours × your honest hourly rate), your packaging, and a per-unit share of overhead. Divide that by (1 minus your target margin) — typically 0.5 to 0.7 for handmade. That's your retail price.

What hourly rate should I pay myself?

At minimum, your local minimum wage. Realistically, $20–$40/hour for newer makers and $40+/hour as you build skill and reputation. Free labor is the silent killer of small craft businesses.

What's a fair wholesale price for handmade?

50% of retail is the industry default. Lower than that and stockists can't make their own margin without raising your retail; higher than that and they won't carry you.

How to Price Handmade Products (without underselling yourself)

Most makers underprice by 30–50%. Here's the framework professional makers actually use.

The five real costs of a handmade product

Most makers price by what feels right, then wonder why they're exhausted and broke. The first move is to count every cost, honestly.

1. Materials

Everything that physically becomes part of the product. Don't forget the bits — thread, glue, findings, finishes. Add 10% for waste and the inevitable order-too-much-then-not-quite-enough cycle.

2. Labor

Time it. With a stopwatch. From the moment you sit down to make until the moment it's packaged. Multiply by an hourly rate you'd actually want to earn — not what you "should" be willing to take.

3. Packaging

Boxes, tissue, custom labels, thank-you cards, tape. Anything the customer touches.

4. Overhead, allocated per unit

Studio rent, utilities, software subscriptions, tools amortized over their lifetime, insurance, accounting. Add it up monthly, divide by units you realistically make per month.

5. Fees and platform costs

Etsy, Shopify, Stripe, payment processing — depending on where you sell. See Etsy fees explained.

The formula

Retail price = total cost ÷ (1 − margin)

For handmade, target 50–70% margin. That gives you room to wholesale at 50% of retail and still make money.

Worked example: a hand-poured candle

Wax, fragrance, wick, jar: $7.50
Labor: 0.6 hours × $30 = $18.00
Packaging: $1.75
Overhead per candle: $2.25
Total cost: $29.50

At a 60% margin: $29.50 ÷ 0.40 = $73.75 retail. Wholesale at 50%: $36.88.

The psychology trap

You'll feel like that's too much. It's not. Most buyers of handmade are paying for the story, the care, and the absence of mass-production. Pricing low signals "amateur" and attracts customers who'll never be loyal anyway.

When to raise prices

Your wait list has grown
You've sold out three drops in a row
Materials cost has risen and you haven't passed it on
It's been more than 12 months

What underpricing actually costs you

If you make 200 units a year and underprice by $5, that's $1,000 in lost margin — and it compounds because under-priced makers can't afford to invest in their business.