How to price handmade products is one of the most challenging parts of running a craft business. Price too high, and you risk losing customers. Price too low, and you could end up working for pennies — or even free.
The reality is, many makers don’t fully factor in the time, care, and effort that go into their creations. We don’t have factories or machines doing the work for us — every piece is made by hand, with skill and love. That’s exactly why your pricing needs to reflect the real value of your work.
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In this guide, I’ll walk you through step-by-step how to price handmade items so you can sell confidently, cover your costs, and make a real profit. You’ll learn:
- The 3 most popular pricing strategies for handmade products
- How to factor in all your costs — even the hidden ones
- How to balance profitability with competitive pricing
- A simple tool to help you set prices without spreadsheet stress
Why Pricing Handmade Products Is So Tricky
Crafting is a labor of love — but it’s also a business. Many handmade sellers fall into the trap of undercharging because they:
- Don’t factor in time spent creating
- Overlook hidden material costs
- Skip overhead expenses like tools, subscriptions, or packaging
The result? A lot of talented creators end up running unprofitable businesses.
That’s why I created the Easy Product Pricing Workbook.
Grab It In The Free Resource Library
Easy Product Pricing: a free, printable tool for handmade sellers that takes the guesswork out of setting profitable prices.
The 3 Most Popular Strategies for Pricing Handmade Products
There are three common pricing strategies that work for handmade products:
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing
Let’s break them down so you can choose what works best for you.
1. Cost-Based Pricing for Handmade Products
Cost-based pricing, also called markup pricing, is the simplest way to set prices. You add a percentage markup to the total cost of producing an item.
Step 1: Calculate Your Total Production Costs
Include:
- Material Costs: Every material, no matter how small.
- Labor Costs: Pay yourself a fair hourly wage for the time you spend making each item.
- Overhead Costs: Rent, utilities, insurance, marketing, and subscriptions.
- Miscellaneous Costs: Packaging, storage, wear and tear on equipment, shipping supplies.
Example:
Materials: $15
Labor: $10
Overhead: $5
Total cost = $30
50% markup = $30 × 1.5 = $45 selling price
💡 Want a shortcut? Use my Easy Product Pricing Workbook to plug in your numbers and get a profitable price in minutes.
Pros: Simple to calculate, predictable profit margins.
Cons: Doesn’t consider customer demand or perceived value.
2. Value-Based Pricing for Handmade Products
Value-based pricing focuses on what your product is worth to the customer — not just what it costs to make.
Examples:
- Perception Pricing: Higher prices for premium materials like gemstones, leather, or specialty fabrics.
- Demand Pricing: Raising prices during peak seasons (e.g., holiday ornaments in December).
- Custom Pricing: Personalized or one-of-a-kind items often command a higher price.
Pros: Highlights uniqueness, often leads to higher profits.
Cons: Can be subjective and harder to calculate.
Tip: Learn what your customers value most and emphasize those features in your product descriptions.
3. Competition-Based Pricing for Handmade Products
Competition-based pricing means researching what similar items sell for and adjusting your prices to stay competitive.
How to Research Competitors:
- Search online marketplaces like Etsy for similar products.
- Note the price ranges, customer reviews, and features competitors highlight.
- Identify what makes your product stand out.
Pros: Keeps you competitive and market-aware.
Cons: May limit your profit margins if competitors underprice.
Tip: If you charge more than competitors, clearly show the value — better materials, custom options, or superior craftsmanship.s, offering custom options, or ensuring higher-quality craftsmanship.
Other Factors to Consider When You Price Handmade Products
- Discounts & Sales: Use discounts strategically but never below your profit margin.
- Dynamic Pricing: Adjust prices based on demand or seasonality.
- Trend Alignment: Leverage social media trends to boost perceived value.
My Handmade Pricing Method
I often use all three strategies together — cost-based, value-based, and competition-based. This gives me a range I can fine-tune based on my goals and what I know about my customers.
3 Steps You Can Try:
- Test and adjust as you go — pricing is never set in stone.
- Calculate prices using all three strategies.
- Compare them and choose a number that reflects both value and market demand.
Price Your Handmade Products With Confidence
If you’re tired of second-guessing your prices or spending hours on spreadsheets, grab my Easy Product Pricing Workbook.
It’s designed for handmade sellers who want to price quickly, confidently, and profitably — without the math headache.
