How to price handmade products without underselling yourself
Most makers price backwards — they look at what others charge and hope it covers everything. Here's the forwards method: count every cost including your time, add the fees, and set a price that leaves actual profit.
Ask ten makers how they priced their best-selling item and most will say some version of "I looked at what similar things sell for". That tells you what the market tolerates, but it tells you nothing about whether you make money at that price. Plenty of makers discover, months in, that their most popular product loses money on every sale. Here's the forwards way to price, step by step.
Step 1: count every material, honestly
Not just the obvious ones. The fabric and the clasp, but also the thread, the stabiliser, the glue, the label, the tissue paper, the box, the tape, the thank-you card. Divide bulk purchases by how many products they actually make. Materials are almost always more than you think — most makers who do this exercise properly find 20–30% more cost than their first guess.
Step 2: pay yourself a wage
This is the step most makers skip, and it's the one that quietly kills craft businesses. Decide an hourly rate — even a modest one — and multiply by the time a piece really takes, including finishing, photographing and packing. If you don't cost your time, you haven't priced a product; you've priced a donation of your labour with materials included.
Step 3: add the costs that aren't the product
Postage costs what it costs you, not what you charge the buyer — if you charge £3.50 and the label plus the box costs £4.80, every order loses £1.30 before you start. Packaging counts. So do listing fees on marketplaces that charge them.
Step 4: add the marketplace's cut — on the full amount
This is where prices sag. On Etsy, roughly 13–16% of the total the buyer pays (including postage) goes in fees once VAT on fees is included; eBay business sellers lose a similar share; TikTok Shop takes 9% including VAT; Amazon's most common rate works out at 15.3% before VAT. And because fees are a percentage of the price, raising your price to cover fees raises the fees too — you can't just add 15% once and be done. (The calculators on this site solve that loop for you.)
Step 5: then add profit — on purpose
Wages are not profit. Profit is what's left after you've paid for materials AND paid yourself — it's what lets the business buy better tools, absorb a fee rise, survive a quiet month, or eventually fund your time to grow. Decide a margin deliberately rather than accepting whatever's left over.
The uncomfortable conclusion
Done honestly, this method usually produces a price higher than you're comfortable with. Resist the urge to "fix" it by deleting your wage. Either the price is right and your buyers are not actually your market, or the product needs less labour, cheaper materials, or batching to make at that price. Both are better discoveries than losing money politely for two years.
The free product pricing calculator on this site walks through exactly these steps — materials, labour, overheads, postage, marketplace fees — and shows your true profit per sale at any price, on any of the major UK marketplaces. The target profit calculator works the other way: tell it what you want to earn per sale and it tells you what to charge.