How to price handmade items
A fair price for a handmade product has to cover four things, in this order:
- Materials and packaging: everything that goes into or around one item.
- Your time: an hourly wage for making it. If you don't pay yourself, you've built a job that pays nothing.
- Overhead: tools, studio space, utilities, photography, website and supplies that aren't tied to one item, added as a percentage.
- Profit: money for the business on top of your wage. It funds growth, new equipment and slow months.
Selling through a marketplace adds a fifth: fees, which are charged on the sale price itself. The higher your price, the more you pay. This calculator solves for the price where everything balances.
The pricing formula, with fees
Because fees are a percentage of the order total (item price plus shipping), you can't just add them on top. The calculator solves for the price directly:
At that price, after every fee and cost, the profit left equals your target margin of the item price, on top of your wage.
Worked example: a $6 material cost
A pair of earrings uses $6 of materials and $1.50 of packaging, and takes 45 minutes at a $20/hour wage. Overhead is 10%, shipping is $5 charged and $5 paid, and the target is a 20% profit margin with standard Etsy fees.
At a listing price of $36.99, Etsy fees come to about $4.44, profit is about $7.80 (a 21.1% margin), and you've still paid yourself $15 for your time. Price the same earrings at the $24 that "feels right", and you'd lose money on every sale once fees are counted.
Understanding Etsy fees
For a typical US seller, Etsy charges:
| Fee | Amount | Charged on |
|---|---|---|
| Listing fee | $0.20 | Each listing (renews after 4 months or a sale) |
| Transaction fee | 6.5% | Item price + shipping + gift wrap |
| Payment processing | 3% + $0.25 | Order total (US rate; varies by country) |
| Offsite ads | 15% or 12% | Only orders from an Etsy offsite ad, capped at $100 |
Rates differ by country, and some countries add a regulatory operating fee or VAT on fees. Etsy updates its fees periodically, so check its current Fees & Payments Policy and enter the figures that apply to you. The same approach works for any marketplace: just change the fee fields. Tallyhouse is independent and not affiliated with Etsy.
The 2× / 4× wholesale-retail rule
A long-standing rule of thumb for makers is wholesale = cost × 2 and retail = wholesale × 2. Shops that stock your work typically buy at wholesale and double it. If you sell direct at a price below the retail figure, you can't offer wholesale later without losing money. The calculator shows both figures for comparison.
Tip: if the price this calculator suggests seems high for your market, the answer is usually to make the item faster or cheaper to produce, not to stop paying yourself.
Frequently asked questions
What is the formula for pricing handmade items?
A common formula is: (materials + labor + overhead) × 2 for wholesale, then × 2 again for retail. Marketplace sellers should also allow for fees, which this calculator includes automatically.
How much does Etsy take from a sale?
For a standard US sale without offsite ads, roughly 9.5% of the order total plus $0.45 ($0.20 listing and $0.25 processing). On a $30 item with $5 shipping, that’s about $3.78. Offsite ad sales add 12–15%.
Should I charge for shipping or offer free shipping?
Either works as long as the shipping cost is covered somewhere. For free shipping, set “Shipping you charge” to $0 and keep “Shipping you pay” at the real cost. The calculator builds it into your price.
How much should I pay myself per hour?
At least what you could earn doing similar skilled work for someone else. Many makers start at $15–25 an hour. If your time is worth more, use our hourly rate calculator.
Last reviewed October 11, 2026. Results are estimates for planning and are not tax, legal or financial advice. Found a mistake? Tell us.