Practical guide 3 min read
How to work out what a handmade item costs to make
Add up materials, your time and overhead per item, choose between materials used and bought, and see why batches cost less.
Three things go into the cost
What a handmade item costs you to make is more than what you spent on supplies:
- Materials: the share of each supply that went into this item.
- Your time: hours spent making it, at an hourly rate you'd accept for the work.
- Packaging and overhead: the box and tissue, plus a share of everything that keeps you making, like tools, electricity and craft fair fees.
Open the Craft Project Cost Calculator and it adds these up per item.
A worked example
A crocheted baby cardigan uses 450 yards of yarn that costs $7.49 for a 200-yard skein, and 4 buttons from a pack of 12 that cost $4.99. It takes 6 hours.
| Cost | Working | Amount |
|---|---|---|
| Yarn used | $7.49 × 450 ÷ 200 | $16.85 |
| Buttons used | $4.99 × 4 ÷ 12 | $1.66 |
| Your time | 6 hours × $15 | $90.00 |
| Packaging | tissue, box, tag | $1.50 |
| Overhead | share of tools and fees | $2.00 |
| Cost to make | $112.02 |
The materials are $18.52 of that. The time is $90. Leave the time out and the cardigan looks like a $22 item, which is how makers end up paid a few dollars an hour.
Materials used or materials bought?
You can't buy 2.25 skeins: you buy 3, and a whole pack of buttons. So the calculator shows two totals:
- Materials used: $18.52, what went into this cardigan.
- Materials to buy: $27.46, what you paid in whole packs.
Price on what you used if the leftovers will go into the next project. Price on what you bought if they'll sit in a drawer, as one-off colours often do.
Working out overhead
Overhead is the cost of being able to make at all: hooks and needles that wear out, stitch markers, blocking mats, electricity, a website or marketplace subscription, craft fair table fees, photo props. Add up a typical month and divide it by the number of items you make in a month. $60 a month over 30 items is $2 each.
Batches cost less per item
Making several at once spreads the setup time and uses up whole packs. If four cardigans take 20 hours instead of 24, with 1,800 yards of yarn and 16 buttons, each costs $97.02 rather than $112.02. Enter the amounts for the whole batch and set Items these amounts make to 4.
Cost a project, step by step
- Add each supply under Materials with the Price paid, the Amount in pack and the Amount used, in the same unit: yards, grams or pieces. Select Add material for more.
- Enter the Time to make (6, 2.5 or 2h 30m all work) and Your hourly rate.
- Add Packaging and Overhead per item.
- If the amounts made several items, enter how many.
- Read the Cost per item, and the materials table for what each supply cost.
From cost to price
Cost is the floor, not the price. You still need a profit on top and room for marketplace and card fees, which are a percentage of the sale. Select Set a selling price with these costs to carry the numbers over to the Handmade Pricing Calculator, which works out the price that covers them.