3 Things to Consider When Pricing Your Handmade Products

3 Things to Consider When Pricing Your Handmade Products: A Guide for Makers

Pricing your handmade products can feel like trying to solve a complicated puzzle. You don’t want to price too high and scare off potential customers, but you also don’t want to price too low and undervalue your hard work. After all, your creations are unique, and they deserve to be priced in a way that reflects their quality, your craftsmanship, and the love you pour into each piece. If you’re scratching your head over pricing, you’re not alone! Here are three things to consider when pricing your handmade products, along with some tips from my own experience to help you find that sweet spot.

1. Calculate Your Costs (And Don’t Forget to Pay Yourself!)

The first step in pricing your products is to calculate the cost of materials, labor, and any other overhead expenses like packaging, shipping, and marketing. But here’s the kicker—don’t forget to pay yourself! So many handmade sellers make the mistake of only covering material costs and end up barely breaking even. Your time and creativity are valuable, so make sure you’re factoring in an hourly wage that reflects your skills.

Example from My Experience: When I first started selling handmade jewelry, I only calculated the cost of beads, string, and clasps. I quickly realized I was underpricing my work because I wasn’t accounting for the time it took to design, create, and photograph each piece, or the cost of packaging. Now, I use a simple formula: Material Costs + Time (Hourly Rate) + Overhead Costs = Base Price. This approach ensures I’m covering all my costs and paying myself fairly.

2. Research Your Market and Competitors

Knowing what similar handmade sellers are charging can give you a ballpark figure for pricing your products. Research sellers who offer comparable items in terms of quality, style, and materials. See where their prices land and consider where you want your brand to fit within that range. Are you a luxury, one-of-a-kind creator, or do you want to appeal to more budget-conscious buyers? Your price should align with your brand positioning and the perceived value of your products.

Example from My Experience: I sell handcrafted candles and noticed that similar sellers on Etsy were pricing theirs between $15 and $35, depending on size and fragrance. I decided to position my brand as a premium option with unique, custom scents, so I set my prices toward the higher end of the range. My pricing reflects the quality of my ingredients and the unique experience my candles provide.

Your price isn’t just a number; it’s part of your brand story. Make sure it tells the right one.

3. Factor in Profit Margins and Future Growth

While it’s important to cover costs and match market expectations, you also need to think ahead. Pricing isn’t just about surviving today; it’s about thriving tomorrow. Factor in a profit margin that not only covers your costs but also allows you to reinvest in your business. Whether it’s buying better materials, expanding your product line, or investing in marketing, having a healthy profit margin is essential for growth. Plus, if you plan to wholesale your products, you’ll need to price them to accommodate both retail and wholesale margins.

Example from My Experience:When I started wholesaling my products, I quickly learned that my initial pricing didn’t leave enough room for both my profit margin and the retailer’s markup. To fix this, I adjusted my pricing to factor in a wholesale discount while still maintaining a 50% profit margin. This allowed me to expand into new markets and grow my business without sacrificing profitability.

Think of your pricing as a foundation. Build it strong enough to support where your business is now and where you want it to go.

Question for You:

How do you approach pricing for your handmade products? Do you have a formula or strategy that works well for you? Share your thoughts and experiences in the comments below—let’s learn from each other.

Pricing your handmade products doesn’t have to be overwhelming. By considering your costs, understanding your market, and planning for profit and growth, you can set prices that reflect your brand’s value and help your business thrive. Happy pricing, makers! 🧶