etsy shop help :: pricing your goods

| handmade | indie biz

etsy shop help

calculators yawn too

hi dearies!  today we are going to talk about pricing your items for your etsy shop.  so many of us underestimate the cost of our items, and not only do we suffer from it, but the handmade movement does as well.  when you charge lower prices, you create a lower-value perception- which, not only hurts your income but also makes other handmade artisans feel the need to lower their prices.  when you sell your handmade goods for income (i.e. want to quit your day job?) you’ve got to make a profit to survive- and you deserve it!

super teeny price tags

let’s face it- pricing your products isn’t easy.  and, unfortunately, there isn’t a go-to tried and true model to follow either.  it’s really more of an art that you have to have get a feel for.  but, let’s start simple.  first things first- you’ve got to cover your costs.  this includes:

-materials used in making the item

-packing materials

– etsy fees

– paypal fees

include everything you use, even the buttons you’ve had for years that your friend gave you- because ultimately, you could have used them for something else, but instead you decided to include them in your package.

factor in your indirect costs as well, that means costs that you incur from having to use machinery, printers etc.  shipping costs are listed separately on etsy, so all you have to do is make sure to correctly calculate the shipping costs and list them appropriately.

wool felt calculator

next, you need to consider your time, and pay yourself a wage (imagine that- pay yourself?!).  this includes designing the item, actually making the item and the time it takes for you to photograph the item, list it, package it and ship it.  this is where you need to decide how much is a fair wage to pay yourself? you deserve to be compensated for your time, and if you don’t counter this in to your price- you won make a profit.  most etsians aim to pay themselves between $12-$30/ hour.

green post tiny tags

danielle, an etsy labs admin, had this to say from her education at art school and her experience being a full time etsy seller:

“Here’s one way a professor of mine taught us pricing. Figure out how many pieces you make a day. Figure out what salary you need to be paid/would like to be paid.  Figure out how many pieces you can make in a year and then divide your desired salary by this and see what you come out with.  Most people will find they are selling themselves way short.”

wooden star house phone

here’s another formula that you might find useful:

{add the cost of materials + your cost of labor} x 150% markup = your wholesale price

{wholesale price x 100% markup} = gives you your retail price

have your own formula? leave us a comment to share what works best for you!

other helpful reads :: {three helpful pricing excerises} {price, you get what you pay for} {bundle up on your way to higher sales} {staying competitive}


  • Hi Bonnie. Great post! I think a lot of people really sell themselves short when it comes to pricing their items. Hobbiests who undervalue their time can make it extremely hard on those of us who are trying to grow a business. I’ve seen items listed that can’t even be covering the cost of materials, now how can I compete with that?

    I’ve just started my etsy business and am approaching it as such. I wrote a business plan, took classes in management, etc. The advice we were given in class for setting prices was to determine how much we would like to make a year and that the market would bearthen figure that only 50% of our time could actually be attached to a specific item or service (the rest is marketing, buying supplies, meeting with accountants, etc.). So if you want to make $10 an hour, you need to “charge” $20 an hour on the production time of an item. It seemed outrageous to me at 1st, but now I realize it makes sense. I can easily spend as much time, if not longer, photographing, listing, blogging about, and otherwise promoting a purse as I did to make it.

    • hey chelsea! thanks for the very good advice. a lot of these formulas do seem outrageous at first- until you realize just how much you’ve been under-selling yourself. :)

  • What a great post, and some really cute etsy items too! I need to be reminded of this often and have been struggling with pricing for a while now. I go back and forth all the time on my formula, especially on time intensive pieces.

  • What a fabulous post! Thank you! I need to look into this, put some of those formulas to work to see if what I’m charging is correct.

  • your professor has some really good advice, it’s something i hadn’t heard before. sometimes the cost of raw goods + time x 4 isn’t really it. thanks!

  • Your posts are so helpful. Myself and a friend have just started a folksy shop and your tips have been invaluable.

    • laura, i’m so glad you find them helpful!! best of luck!

  • This is a good to know but if I use these formulas I could not sell my aprons. They tend to be more labor intensive then a lot of other sell-able items. All my items are one of a kind with an element a vintage item up-cycled into them. It takes time to find the vintage items which not always are cheap. I would like to make this a stay at home career. But to make what I need I cannot charge that for my items. Do you have any suggestions?

    • hey carrie! in my opinion, some things just can’t generate enough profit. i use to sell aprons in my etsy shop, and all but lost money on each one of them- and i was able to use wholesale fabric and supplies. i’m sorry i don’t have a good answer!

  • *climbs up on soapbox*
    My formula is a bit different :)

    I work out the yearly amounts I will spend on supplies, overheads and my own wages.
    For example:
    £10000 supplies.
    £15000 overheads, including indirect supplies like sandpaper, drill bits, etc.
    £35000 for my own labour.
    Total: £60000 is required to break-even every year.

    In my wholesale formula, I double my supplies cost, so I can take away £20000 from the total of £60000.
    This leaves £40000 that I need to make through my direct labour (the time I spend actually making jewelry) every year.

    As I know I want to work 2000 hours per year, but that I work an hours indirect labour (admin, marketing etc) for every hour of direct labour (you need to track your time lol), so I actually only have 1000 hours of labour that I can bill for, so my labour rate is £40 an hour (£40000/1000).

    Some people include wages for indirect labour in their overheads, but this is how I figure it out. :)

    Wholesale formula:

    (supplies & packaging x2) + (time spent on piece @ £40 an hour).


    Wholesale x (at least) 2, plus any applicable sales tax.

    I know that this formula doesn’t appear to include profit in the wholesale formula, but the way I look at it is that I won’t make any profit unless I hit my break-even point, and go beyond it, so my goal would be to make a particular amount of sales every year in order to get a level of profit that I am happy with.

    Also, Id like to point out that my example doesn’t represent what I would like to make – my own overheads will be higher than £15000 (I’m currently starting out as a jewellery business owner), and I will be aiming for a yearly income of around £50000.

    I know some people would find this shocking, and are happy to charge low wages to make sales, but consider the following:

    If you attend business lessons in the uk for running a deli for example (one of my relatives desperately wants to own a deli/cafe and went on a course lately) you will be told that you should aim for a personal income of £40000 to £50000 a year simply because you are a business owner and you are entitled to good pay – and this is a business where you have staff to work FOR you selling yummy food.

    As skilled craftspeople, there’s no reason why we shouldn’t charge the same, or more. :)

    Hope this helps someone – pricing can be hard! :)
    *climbs off of soapbox*

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