warebyhow to price handmade goods
a simple formula for makers and home bakers, worked through with real numbers for a candle and a dozen cookies.
in this post
1the formula2your time3overhead4example: a candle5example: cookies6fees7check your price8questionsadd up what one item costs you to make: materials and packaging, your time at a real hourly wage, and a share of your overhead. then set a price that still leaves a profit after every fee. a common rule of thumb for handmade goods is to double your cost for a wholesale price, and double that for retail. at the very least, your price should cover your costs and fees with something left over.
what’s the formula?
pricing handmade work comes down to two lines:
the first box is the one everyone counts. your time and your overhead are real costs too, and leaving them out is how a shop can sell out every week and still lose money.
how do you price your time?
pick an hourly wage you’d accept for doing this work for someone else, and charge it. then time a full batch, start to finish: prep, making, cleanup and packing. divide by the number of items.
example: a batch of 12 candles takes 90 minutes. at $20 an hour, that’s $30 of time, or $2.50 a candle.
what counts as overhead?
everything you pay for that isn’t inside one item: booth fees, equipment, molds and tools, your share of utilities, gas for deliveries, insurance and your website. add up a typical month and divide by how many items you sell in a month.
example: $150 a month of overhead and 150 items sold a month is $1.00 per item.
example: how do you price a soy candle?
| cost | per candle |
|---|---|
| wax | $2.10 |
| wick | $0.15 |
| jar | $1.60 |
| fragrance oil | $1.05 |
| label and box | $0.60 |
| your time (7.5 minutes at $20 an hour) | $2.50 |
| overhead | $1.00 |
| your cost | $9.00 |
double it for wholesale ($18), and double that for retail ($36). that may be more than you planned to charge, and the rule is there for a reason: it leaves room to sell to shops later. if $36 is too high for your town, see what similar local candles sell for, and land somewhere you still make a profit.
here’s what you’d keep from a $26 candle on wareby’s free open plan:
| amount | |
|---|---|
| price | $26.00 |
| sale fee (10%) | −$2.60 |
| card processing (3% + 30¢) | −$1.08 |
| your cost | −$9.00 |
| profit | $13.32 |
that’s on top of the $2.50 you already paid yourself for your time.
how do fees change your price?
every way you sell takes a cut: a market charges a booth fee, a card reader charges per payment, and a marketplace charges a sale fee. on wareby, it’s one sale fee plus card processing. here’s what you keep from a $28 order on each plan:
| plan | per month | sale fee | you keep |
|---|---|---|---|
| open | $0 | 10% | $24.06 |
| found | $29 | 8% | $24.62 |
| loved | $79 | 6% | $25.18 |
card processing is 3% + 30¢ per order on every plan. the sale fee is a percentage of the order total, including delivery or shipping, but not sales tax. a lower fee covers its monthly price once you sell enough: about $1,450 a month for found, and about $1,975 a month for loved, counting the fee savings alone.
since card processing includes 30¢ per order, small orders lose a bigger share to fees. bundles (a half dozen, a set of two candles) raise your order size and shrink that share.
how do you check your price?
- look at similar local makers. if you’re far below them, you’re probably undercharging.
- don’t price against big-box stores. a factory candle isn’t your competition, and pricing like one leaves nothing for your time.
- watch what sells out. if something sells out every week, raise its price a little.
- raise prices in small steps. when butter or wax goes up, adjust, and tell your regulars a week ahead.
for more on running your shop, read the seller guide.
questions people ask
what is the formula for pricing handmade items?
materials + your time + overhead = your cost. then set a price that still leaves a profit after fees. a common rule of thumb is cost × 2 for wholesale, and wholesale × 2 for retail.
how much should i pay myself per hour?
pick a wage you’d accept for doing the same work for someone else, and build it into your cost. if you leave it out, your “profit” is really just your unpaid time.
should i include fees in my prices?
yes. add up the sale fee, card processing and any booth fee for the way you sell, and make sure your price still leaves a profit after them.
how do i price baked goods?
with the same formula: ingredients and packaging, your time per batch divided by the number of items, and a share of overhead. time is often the biggest cost, so time a full batch from start to finish.
what does wareby charge sellers?
the open plan is $0 a month and 10% per sale. found is $29 a month and 8%. loved is $79 a month and 6%. every plan adds card processing of 3% + 30¢ per order. there are no listing fees or ad fees.
we started tandoco, a small bakery in minneapolis, and sold under a blue tent at farmers markets before we built wareby. our story
