How to Price Your Crafts: Choose the Right Formula for Your Business Goals

Price your crafts with confidence by choosing a pricing formula that truly fits your unique business goals.

The right price for your handmade goods depends on more than just materials and time. It hinges on your business goals: why you're selling, where you're selling, and what you want to achieve with your craft business.

Whether you're a hobbyist just starting out, building a full-time handmade business, or selling across multiple platforms like Etsy, craft fairs, or wholesale, different pricing formulas serve different needs.

This article will help you match the right formula to your business model.

You'll be guided through a decision-making process that considers your experience level, the way you run your business, your sales platform, and your financial goals. By the end, you'll know exactly which pricing approach to use and why.

Why Your Business Goals Should Drive Your Pricing Strategy

Pricing isn't just about plugging numbers into a formula. It's about creating a sustainable business that supports your goals.

While a pricing formula will help ensure you are charging enough to make a profit, your pricing decisions should also reflect the purpose behind your craft business.

That's why choosing the right pricing strategy starts with clarifying your business goals!

You might be surprised to consider that two sellers could make the exact same product but have completely different pricing strategies, and both could be right.

Why?

Because they're working toward different goals.

Common Craft Business Goals

Hobbyist or Side Hustle

You enjoy making and selling crafts part-time and want to cover your costs while earning a modest profit.

Growing Business

You're starting to take things more seriously and want to reinvest profits to grow your product line, improve your branding, or expand your presence online.

Full-Time Seller with Income Targets

This business is your livelihood. You need to ensure your pricing supports a consistent income, covers all expenses, and funds your long-term business goals.

Wholesale Expansion

You're ready to scale and want to price your products for both direct sales and wholesale accounts without sacrificing profit.

Etsy-Focused Business

You primarily sell on Etsy or similar marketplaces, where listing fees, transaction charges, and packaging all impact your bottom line.

Each of these goals comes with its own priorities, and some pricing formulas align better with specific goals than others.

In the next section, we'll break down which formulas work best for each type of business model, so you can price your crafts in a way that supports your unique path.

Choose a Formula Based on Your Business Goals

Once you clarify your goals, it's time to match those goals with the right pricing approach.

Each craft pricing formula serves a different purpose. Some are quick and simple, while others are built for long-term business planning.

In this section, you'll find clear recommendations for which formula to use based on your current business stage, where you sell, and what you want your craft business to achieve.

Whether you're just starting out or aiming to scale up, there's a pricing method that fits your needs.

Goal: You're Starting Out or Selling as a Hobby and Want to Keep Things Simple

If you're new to selling or treating your craft business as a fun side hustle, you might want something very simple. Your goal is to cover your costs, earn a little profit, and keep things simple.

Recommended Formula: Basic Markup

This formula is quick to calculate and easy to understand.

Formula: (Materials + Labor) × 2 = Retail Price

Why It Works

• It's beginner-friendly and gets you pricing quickly without a steep learning curve.
• It ensures your materials and time are covered while giving you a fair profit margin.

Limitations

• It doesn't include overhead costs, marketplace fees, or long-term profitability.
• It may not scale well if you plan to turn your hobby into a full-time business later.

Use this beginner-friendly formula to price your crafts.

Goal: You Plan to Sell on Etsy or Other Online Marketplaces

Selling on platforms like Etsy, Amazon Handmade, or ArtFire means you're dealing with listing fees, transaction charges, and packaging costs. All of these expenses can eat into your profit if you're not careful.

Recommended Formula: Etsy-Specific Formula

This formula is designed to account for the unique costs of selling on third-party platforms.

Formula: ((Materials + Labor) × Markup) + Etsy Fees + Packaging = Retail Price

Why It Works

• It includes all those small but important extras like Etsy's fees and shipping supplies.

Limitations

• It is tailored specifically for Etsy, so it may not translate well to other sales channels like craft fairs, your own website, or wholesale.
• It omits some expenses that may be relevant to certain craft sellers.

Pro Tip: Add a small buffer to cover occasional sales, discounts, or free shipping offers.

Try out the online Etsy-specific pricing calculator.

Goal: You'd Like to Sell Time-Intensive or One-of-a-Kind Items

If your products are highly detailed, custom-made, or require several hours to create, your pricing needs to reflect the true value of your time and craftsmanship.

Recommended Formula: Hourly Rate

This formula puts your labor front and center.

Formula: (Time × Hourly Rate) + Materials = Retail Price

Why It Works

• It ensures you're paid fairly for the hours you spend creating each piece.
• It can be a good choice for custom orders, fine jewelry, art pieces, or any product that can't be mass-produced.

Limitations

• With this formula, you're working for an hourly wage, which can severely limit your ability to scale your business

It's a flexible method to consider using when your time is your most important resource.

Try out the hourly rate online calculator.

Goal: You Have a Specific Monthly Profit Goal

If your goal is to earn a specific average monthly profit, you'll need a pricing strategy that starts with your financial goals.

Recommended Formula: Profit Goal Formula

This formula helps you work backward from how much money you want to earn to calculate the price required to reach your income goal.

Formula: (Materials + Labor + Overhead) + (Monthly Profit Goal ÷ Units Sold) = Retail Price

Why It Works

• It reverse-engineers your pricing to show you what you need to charge to meet specific income goals.
• It gives you a realistic look at just how much product you need to sell to earn your target income.

Limitations:

• It requires accurate sales forecasting. You need a realistic estimate of how many items you can sell each month. If your projections are off, your pricing (and income) may fall short.
• It can lead to high prices. If your monthly income goal is ambitious and your sales volume is low, this formula can result in unrealistic product prices.
• It can be tricky to apply this formula across a wide variety of products unless you calculate separate goals for each item type.

Example: I want to earn $1,500 per month. If I can realistically sell 50 items, I'll need to price each one to include $30 in profit, on top of my costs, to hit my goal.

See how the profit goal pricing formula works for you.

Goal: You Want to Sell Wholesale

If you're planning to sell both directly to customers and in bulk to shops or boutiques, you need a pricing formula that ensures profitability at both levels.

Recommended Formula: Wholesale-to-Retail

This two-step formula will show you whether you can afford to sell wholesale profitably.

Formula:
Wholesale Price = (Cost + Labor) × 2
Retail Price = Wholesale Price × 2

Why It Works

• It ensures you're not losing money when offering wholesale pricing.
• Your retail price is set high enough to absorb discounts and still earn a profit.
• Consider using it for products like stationery, accessories, candles, and home decor that are easy to reproduce in batches and appeal to retail buyers.

Limitations

• If your retail price is already close to what the market will bear, doubling that to create wholesale pricing might not be feasible.
• This formula works best for scalable products. If your items are time-consuming or one-of-a-kind, wholesale pricing may underpay you for your time.
• Unless you build them into your base costs, this formula may leave out general expenses like tools, rent, or software, reducing profitability.

Check out the wholesale to retail online calculator.

Goal: You Want to Build for Long-Term Sustainability

If you're running your craft business like a true business with ongoing expenses, investments, and growth plans, your pricing needs to reflect the full picture.

Recommended Formula: Overhead-Adjusted

This comprehensive formula includes all the behind-the-scenes costs of running a business:

Formula: Materials + Labor + Overhead + Profit = Retail Price

Why It Works

• It accounts for everything, not just materials and time, but also your workspace, tools, subscriptions, utilities, and more.
• It helps you set prices that are truly sustainable, especially if you're running your business full-time or planning to scale.
• It can work well for studio owners, established sellers, or anyone aiming to grow a serious, long-term handmade business.

Limitations

• Estimating how much overhead to assign per product can be tricky, particularly if you sell a variety of items or your expenses fluctuate.
• Because it includes every business cost, this formula may produce prices that feel too high for certain markets unless your perceived value is strong.

Use the online overhead-adjusted pricing calculator to explore this formula.

What If Your Goals Change?

Your business goals won't stay the same forever, and that means your pricing strategy may change over time as your craft business evolves.

Recommendation: Revisit your pricing every 6 to 12 months, or whenever you experience a major business change. This helps keep your prices aligned with your goals.

Not sure where to start? Try all 6 of our craft price calculator tools on one page, and easily compare the results of different pricing strategies!

FAQ: How to Price Your Crafts Based on Your Business Goals