Handmade Pricing Calculator: Wholesale and Retail Prices

The handmade pricing formula

The formula most craft business guides teach builds the price up from what the item really costs you, so your time is paid before any profit is counted.

Cost = materials + (hours × hourly rate) + overhead Wholesale = cost × (1 + profit %) Retail = wholesale × 2

Wholesale is what a shop pays you. The shop doubles it, so the retail price is what a buyer pays anywhere, including in your own shop. Selling direct at retail, the extra half is yours, and it is what pays the marketplace fees, photography, listings and the slow months.

Example: a crochet toy

$6 of yarn and stuffing, 3 hours of work at $15 an hour and $1.50 for packaging and labels make a cost of $52.50. With 20% profit the wholesale price is $63, and the retail price is $126.

Formula	Price	You keep after 10% fees	Per hour
Materials × 3	$18.00	$16.20	$2.90
(Materials + labor) × 2	$102.00	$91.80	$28.10
Cost + 20%, then × 2	$126.00	$113.40	$35.30

Per hour is what's left after fees, materials and overhead, divided by the 3 hours. A materials-based formula looks reasonable for quick items but falls apart for anything that takes real time.

Pricing tips

Time yourself on a few pieces. Most makers underestimate, and the time is usually the biggest part of the cost.
Keep shipping separate. Charge shipping on its own or build the real label cost into the price, but don't count it twice.
Check similar listings, then decide. If the formula's price is far above the market, make the item faster or in batches before cutting your rate.
Leave room for sales. A 20% off coupon comes out of your retail margin, so make sure the discounted price still covers your cost and fees.

Questions

How do I price handmade items?

Add materials, your time at an hourly rate and overhead to get your cost. Add a profit margin to get the wholesale price, then double the wholesale price for retail. A crochet toy with $6 of yarn, 3 hours at $15 and $1.50 of overhead costs $52.50, wholesales at $63 with 20% profit and retails at $126.

What hourly rate should I pay myself?

At least the minimum wage where you live, and more for skilled work. If the price that rate produces seems too high for your market, look at making the item faster or in batches rather than paying yourself less.

What is the difference between wholesale and retail price?

Wholesale is what a shop pays you for an item it will resell. Shops usually double it, so wholesale is about half of retail. Pricing at retail even when you only sell direct leaves room to sell to shops later without losing money.

Should marketplace fees be included in my price?

Yes. On Etsy a US seller pays about 10% of each order in transaction and payment processing fees, plus a $0.20 listing fee, and more on sales from Offsite Ads. Enter your fee rate and the calculator shows what you keep. The Etsy fee calculator gives the exact amount for your country.

Why isn't materials times three enough?

It leaves out your time. For the crochet toy above, $6 of yarn times three is $18. After about 10% in fees and $7.50 of materials and overhead, that pays about $2.90 an hour for three hours of work.

What counts as overhead?

Costs that aren't in the item but come from making and selling it: packaging, labels, tool wear, electricity, software and subscriptions, and market booth fees. Add them up for a month and divide by the number of items you make.