The true cost of selling your handmade products

by tolmema on January 14, 2012

***Update: I’ve created a Product Pricing Worksheet to go with this blog post.

Free download can be found here.


Pricing your handmade products is really, really hard. Not only do you have to include factors like your overhead and material costs, you also have to set a price point that your customers will buy at. Sometimes the true cost of your products and a popular price point don’t match at all.

So how much should you price your products for? Well, lots of crafters use the pricing formula below to determine the price of their products:

product pricing formula | tolmema

Setting Your Costs

For an example, I will use my crochet house slippers to create a cost guideline. Each pair of house slippers requires two skeins of coordinating fabrics. Say that I spend $6 per skein on something that is mid-range in price, like Patons yarn or Caron yarn – the material cost comes to $12. I generally pay myself $10/hour to create crochet items, which may be high or low to other crafters (I think it’s pretty meager). It takes me a little less than an hour to make a pair, so say about $8 in labor. The total for my first formula of materials + labor = $20.

So, if I wanted to charge a wholesale price to someone, it would be $40. And if I were to charge a retail price for them, they would cost $80! To me that seems pretty high for a pair of slippers. Not that I personally don’t think they are worth it, but most people would not purchase a pair of slippers for $80. And even though I believe that I could sell my slippers for $40/pair, I don’t – I sell them for just $20, which means that I very rarely, if ever, make a legitimate profit from each pair.

It’s obvious that I am selling myself short, and that I really need to take a look at my pricing structure again if I ever want to actually profit from my crafting. However, I get so many orders at the $20 price point, and I LOVE making things for people, so I haven’t raised them. I work very hard to make great products, and if I am not 100% happy with the finished product I will go back and revise/fix/improve until it’s perfect. The love, integrity, and time that I put into each product is worth something, and I fully believe that $40  is a fair price for that. Some people may not agree, but in the end, wouldn’t you want to sell your products to someone who truly wants them, and will truly cherish them for what they are – labors of love?

As you can see, it is very hard to set your pricing at a point that is fair to both you and what the consumer thinks is a valid price. If you want to actually profit from your crafting, you HAVE to charge what your product is worth. It’s going to be higher than Walmart pricing, and that’s okay, because your items are made by hand and that takes time, effort, materials, and more. If the consumer truly appreciates the products that you are selling, they will buy it, regardless of the price. The biggest factor is demonstrating the value to your customers. Once you do that, people will realize that your products are worth their cost, and you will see more sales!


Enter your name and email address to subscribe to my blog and receive notifications of new posts by email.


{ 26 comments… read them below or add one }