Pricing is one of the most important parts of selling handmade goods. Set your prices too low and you'll burn out working for less than you deserve. Set them too high without context and buyers may hesitate. Getting pricing right means understanding your costs, valuing your time, and knowing your market.
Before you can set a price, you need to know what it actually costs you to make and sell each item. Most sellers underestimate their costs, especially when they're starting out.
Add up the cost of every material that goes into the finished product. This includes the obvious (fabric, clay, wood, paint, wire) and the less obvious (glue, sandpaper, clasps, thread, varnish). If you buy materials in bulk, calculate the per-item cost.
Overhead includes everything that supports your work but isn't tied to a single item. This might include tools, equipment, workspace costs, software subscriptions, packaging materials, and utilities. Estimate your monthly overhead and divide it by the number of items you produce in a month to get a per-item overhead cost.
If you offer free shipping, your shipping costs need to be built into your product price. Even if you charge for shipping separately, factor in the cost of packaging materials like boxes, bubble wrap, tape, and labels.
On Crafts.ly, sellers pay a 5% seller fee plus payment processing costs (2.9% + $0.30 per transaction). Make sure to account for these fees when calculating your margins. If you sell on other platforms as well, note that fee structures vary.
Crafts.ly also adds a 10% service fee on top of your listed price, which is paid by the buyer. This is how the platform keeps seller fees low at 5%. The buyer sees the final price including this fee at checkout. When setting your prices, keep in mind that buyers will pay more than your listed amount, so price based on what you want to earn rather than what you want the buyer to pay.
Your time is the most commonly undervalued cost in handmade pricing. Many sellers price their work based only on materials, which means they're essentially working for free.
Decide on an hourly rate that reflects the skill and effort involved in your work. This doesn't have to match corporate salary rates, but it should be a rate you feel good about. Track how long it takes you to make each item, and include that labor cost in your price.
For example, if a piece takes you 3 hours to make and you value your time at $25 per hour, your labor cost is $75. That's separate from your materials and overhead costs.
If you're just starting out and building your reputation, you might price slightly lower while you establish your presence. But don't undervalue your work long-term. Raising prices later is always harder than starting at a fair rate.
At a minimum, your price should cover all of your costs:
Materials + Labor + Overhead + Profit Margin = Your Price
Once you've calculated your total cost per item, add a profit margin on top. A profit margin isn't optional. It's what keeps your business sustainable, gives you room to absorb unexpected costs, and allows you to reinvest in your craft. Without it, you're breaking even at best.
How much margin to add depends on your market, your product, and your goals. Look at what similar items sell for, factor in the value of your work, and price in a way that you can sustain long-term.
If your calculated price feels too high, resist the urge to just lower it. Instead, look at whether you can source materials more affordably, streamline your process, or adjust the product to reduce production time.
Look at what other sellers charge for similar items, both on Crafts.ly and on other platforms. This gives you a sense of what buyers expect to pay. Keep in mind that pricing too far below comparable sellers can signal lower quality, while pricing significantly above them requires clear differentiation.
When comparing prices, consider the quality of materials, the level of detail, the seller's reputation, and how the item is presented. A well-photographed listing with a compelling story can justify a higher price than an identical item with a basic listing.
Don't let comparison drive you to undercut your costs. If your work is genuinely higher quality or more unique, price accordingly and let the work speak for itself.
Start with your total costs (materials, labor, overhead, fees) and add a profit margin. This is the most straightforward approach and ensures you're always covering your costs. A 20-40% profit margin on top of costs is a reasonable range for handmade goods.
Price based on the perceived value to the buyer rather than your costs alone. This works well for items with strong emotional appeal, unique designs, or premium materials. A one-of-a-kind hand-painted jacket may be worth far more than the sum of its materials and labor.
Offer products at different price points to appeal to a wider audience. You might sell small, affordable items (stickers, prints, simple jewelry) alongside larger, premium pieces. The smaller items give buyers an entry point into your shop, and they may return for higher-priced items later.
Understanding how fees work helps you price accurately. Here's a quick breakdown:
If you list an item at $50 with free shipping:
If you're targeting a specific take-home amount, work backwards from your desired earnings to determine your listing price. For example, if you want to earn $50 on a sale, you'd need to list at approximately $54.70 to cover the 5% seller fee and processing costs.
© Verra Technology Corporation