Practical guide 3 min read
How to price handmade items, including Etsy fees
Solve for a price that covers your costs, your hourly rate, a profit and marketplace fees, and check what a price you have in mind really pays.
Start from what it costs you
A price has to cover three things: what the item cost to make (materials, your time, packaging and overhead), a profit on top, and the fees taken when it sells. Get the cost first; the Craft Project Cost Calculator helps. Then open the Handmade Pricing Calculator to turn it into a price.
Why you can't just add fees on top
Marketplace and card fees are a percentage of the sale, so they grow as the price grows. Adding 9.5% to your cost doesn't cover a 9.5% fee, because the fee is then 9.5% of the bigger number. The right way is to solve for the price:
price = (cost + profit + fixed fees) ÷ (1 − fee percentage)
A worked example
A crocheted bag uses $12 of materials and takes 3 hours. You want $18 an hour, plus $1.50 overhead and $1 packaging, and a 20% profit on top. You sell on Etsy.
- Cost: $12 + 3 × $18 + $1.50 + $1 = $68.50
- Profit target: 20% of $68.50 = $13.70
- Etsy fees: a 6.5% transaction fee plus 3% payment processing, so 9.5%, plus $0.25 per order and a $0.20 listing fee
- Price: ($68.50 + $13.70 + $0.45) ÷ (1 − 0.095) = $91.33, rounded up to $92
At $92, fees take $9.19. You keep $68.31, which is your $54 wage and $14.31 of profit: $22.77 an hour.
Had you simply added 20% to the cost and charged $82.20, fees would leave you just $5.44 of profit.
The tiers worth knowing
The calculator also shows the prices that cover less, so you know where your floor is:
| A price that… | For the bag |
|---|---|
| Covers materials and fees only (you work for free) | $16.52 |
| Also pays your hourly rate, with no profit | $76.19 |
| Adds your 20% profit | $91.33 |
The traditional formula
A long-standing rule for handmade goods is:
- materials + labour + overhead = cost
- cost × 2 = wholesale price
- wholesale × 2 = retail price
For the bag, that's $137 wholesale and $274 retail. It's built for selling through shops, which buy at wholesale and double it. If you only sell direct, the cost-plus-profit price above is the realistic one, but the gap shows why wholesaling a slow, hand-made item rarely pays.
Check a price you have in mind
Switch to Check a price and enter it. The calculator shows the fees, what you keep and your effective hourly rate. At $45, the same bag leaves you $25.78 after materials and fees: $8.59 for each hour of work.
Fees by where you sell
The presets are starting points; fees change and differ by country, so compare them with your own statements and edit the numbers.
- Etsy: 6.5% transaction fee on the price plus shipping, payment processing (3% + $0.25 in the US), and a $0.20 listing fee. Offsite Ads add 12–15% on the sales they bring.
- Card reader, in person: typically around 2.6% + $0.15. The bag would need $84.55.
- Your own online shop: card processing, often around 2.9% + $0.30, plus your platform's subscription in overhead.
Shipping
Enter the shipping you charge and what postage really costs you. Etsy's transaction fee applies to shipping too, so charging exactly what postage costs still loses the fee on it. The calculator includes both.
Price it, step by step
- Enter Materials, Time to make and Your hourly rate, then Overhead and Packaging.
- Enter Shipping you charge and Shipping you pay, if any.
- Choose where you're Selling on, and check the fee boxes against your statements.
- Set Profit on top of costs and Round up to, then read Price it at.
If the price feels too high for your market, the answer is rarely to cut your wage. Look at how long the item takes, the materials, or making it in batches.