"Materials plus a little extra": that is how most prices for handmade products come about. It feels fair, but it often doesn't add up. Your own working time is missing, the platform fees are missing, and in the end you sell a lot and earn little. Here you work out your price properly, once.
The basic formula
Cost per item = materials + working time + packaging + share of your running costs
Selling price = (cost per item + profit) ÷ (1 − fee share)
The second part matters: platform fees are calculated on the selling price, not on your costs. That's why you divide by the share that is left after fees.
Step 1: Material cost per item
Break each material down from the pack price to the amount you need for one item. Example: 1 kg of wax costs EUR 12 and one candle needs 200 g. That is EUR 2.40 per candle.
Don't forget waste: leftovers, failed attempts, fabric that is left over after cutting. An allowance of 5 to 10% is realistic for many materials.
Step 2: Your working time
This is where the most common mistake happens. Measure honestly how long one item takes, including preparing, tidying up, photos and packing. Then decide what an hour should be worth to you. The guide How to calculate your hourly rate shows how to find a realistic rate.
Step 3: Packaging and running costs
Box, tissue paper, label, thank-you card: these cost money per item too. On top come running costs such as tools, electricity or your shop subscription. Spread them roughly over the number of items you sell per month.
Step 4: Platform fees
On Etsy, a normal sale usually costs you around 12 to 13%. If the sale comes through Offsite Ads, it can be more than 25%. You'll find the individual fees and a complete example in Etsy fees 2026. You can check your own price in seconds with the free Etsy fee calculator.
Worked example: a scented candle in a jar
- Wax: 200 g from 1 kg at EUR 12 = EUR 2.40
- Wick: 1 of 50 at EUR 5 = EUR 0.10
- Fragrance oil: 10 ml of 50 ml at EUR 9 = EUR 1.80
- Jar: EUR 1.50
- Materials total: EUR 5.80, with 5% waste EUR 6.09
- Working time: 15 minutes at EUR 20 per hour = EUR 5.00
- Packaging: EUR 0.70
- Share of running costs: EUR 0.50
- Cost per item: EUR 12.29
With a simplified 12.5% in Etsy fees, you get:
- Minimum price without profit: EUR 12.29 ÷ 0.875 = EUR 14.05
- Recommended price with 20% profit: EUR 12.29 × 1.2 ÷ 0.875 = EUR 16.85, rounded to EUR 16.90
At EUR 16.90 you keep EUR 2.50 profit after fees and costs. Together with the EUR 5.00 planned for your time, you earn around EUR 30 per hour.
For comparison: many sellers would offer a candle like this for EUR 12. Then only EUR 3.21 is left after fees and materials for a quarter of an hour's work, so just under EUR 13 per hour, and nothing is left for profit.
Bulk and wholesale prices
If a shop wants to resell your products, it usually expects a much lower buying price, often around half the retail price. Check beforehand whether that price is still above your cost per item. If it isn't, either your retail price has to go up or wholesale doesn't make sense for this product. The same applies to bulk prices for 5, 10 or 25 items: only give as much discount as your margin can carry.
Common mistakes
- Working time left out or set far too low
- Waste and failed attempts forgotten
- Fees calculated on costs instead of on the selling price
- Prices not adjusted after the supplier raised material prices
- Free shipping offered without building it into the price
- Price based only on competitors, without knowing your own costs
Templates for your kind of product? Handmade & Etsy Seller Studio has templates for candles, soap & cosmetics, jewellery, crochet & knitting, embroidery and laser engraving, each with typical materials and a fully calculated example. The app shows cost per item, minimum price and suggested price for Etsy, your own shop, markets, direct sales and wholesale. Offline app, your data stays on your device, one-time purchase with no subscription.
Frequently asked questions
What is a fair hourly wage for handmade work?
That depends on your goal. As a lower limit, you can use the minimum wage where you live. If it is meant to be more than a hobby, you need considerably more, because time for photos, messages and shipping adds up too.
My competitors are much cheaper. What should I do?
Don't automatically follow them. First check whether they earn anything at all at that price. It is often more worthwhile to improve your quality, photos and description than to cut your price.
How often should I review my prices?
Whenever materials or postage get more expensive, and otherwise about once a quarter.
When does a product stop making a loss?
That is what break-even tells you. The guide How to calculate break-even shows how.
Let the app do the pricing instead of maintaining spreadsheets
Handmade & Etsy Seller Studio does exactly this calculation for every product: you add materials with their pack price, enter items per batch, working time and packaging, and choose the sales channel. The app shows cost per item, minimum price, recommended price and your real hourly wage. When a material gets more expensive, you immediately see which products are affected. And if you want to know what is left after each real sale, you enter your sales or import your Etsy statement. Everything runs offline, with no subscription, and your data stays on your device.
The fee values in the example are simplified (as of October 2026). This article is a calculation aid and is not tax or financial advice.