Why handmade pricing is different
When you make products by hand, the biggest cost is often your own time, and it is the one most makers leave out. A price that only covers materials feels fair, but it means you work for free. It also leaves no room to sell to shops later, because a store needs to buy below your retail price and still make a profit.
This calculator builds your price in the order most maker pricing guides recommend: first the full cost of one item, then a wholesale price, then a retail price.
How the calculator works
- Materials: everything that ends up in or around one finished item, including packaging, labels and tags.
- Labor: the minutes it takes to make one item, priced at the hourly rate you want to pay yourself.
- Overhead: your monthly running costs, such as tools, studio rent, software, website and card fees, divided by the items you make in a month.
- Wholesale price: your cost times a wholesale multiplier. A multiplier of 2 gives you a 50% margin at wholesale.
- Retail price: the wholesale price times a retail multiplier. A multiplier of 2 is keystone pricing, which gives a store a 50% margin.
Change any input and every figure updates.
The handmade pricing formula
| Figure | Formula |
|---|---|
| Labor per item | (Minutes per item ÷ 60) × hourly rate |
| Overhead per item | Monthly overhead ÷ items made per month |
| Cost per item | Materials + labor + overhead |
| Wholesale price | Cost per item × wholesale multiplier |
| Retail price | Wholesale price × retail multiplier |
| Margin | (Price − cost) ÷ price |
Example: you make soap bars. Materials and packaging cost $3.50 per bar. Each bar takes 15 minutes, and you pay yourself $20.00 an hour, so labor is $5.00. Your overhead is $250 a month and you make 200 bars a month, so each bar carries $1.25 of overhead.
- Cost per bar: $3.50 + $5.00 + $1.25 = $9.75
- Wholesale price: $9.75 × 2 = $19.50, a 50% margin and $9.75 profit per bar
- Retail price: $19.50 × 2 = $39.00
When you sell a bar direct at $39.00, you keep $29.25 after costs, a 75% margin. When a shop sells it, they pay you $19.50 and you still keep $9.75 on top of your wage.
Pay yourself a real wage
Your hourly rate is a cost, not a bonus. Pick a rate you would accept for skilled work in your area, then time a batch and divide by the number of items to get minutes per item. Batch timing is more accurate than timing one piece, because it includes setup and clean-up.
Leave the rate at zero and the example above drops to a $3.50 cost, a $7.00 wholesale price and a $14.00 retail price. That price only pays for supplies. The profit you see is really your unpaid wage.
When to change the multipliers
- The retail price is above what buyers will pay. Lower your costs first: buy materials in bulk, speed up a step or make bigger batches. Cutting the wholesale multiplier below 2 leaves little profit once your time is paid.
- You only sell direct. You can price below the full retail figure, but keep it above wholesale, so you can open stockists later without raising prices.
- The store asks for a different markup. Some categories and stores work with a retail multiplier other than 2. Set the retail multiplier to match, and use the markup calculator or the margin calculator to check the numbers.
Common mistakes
- Forgetting packaging, shipping supplies or card fees in materials and overhead.
- Pricing from a single fast piece instead of an average batch.
- Charging the same retail price online and at a craft fair, then giving stores a wholesale price that does not leave them room.
- Offering volume discounts without checking your margin. The bulk discount calculator shows your margin at each tier.
Next steps
If you already know your full cost per unit, the wholesale price calculator sets prices from a target margin. Our guides on pricing products for wholesale and selling wholesale to retailers cover what shops expect. When your prices are ready, put wholesale and retail side by side on a line sheet you can send to stores.