How to Properly Calculate Prices for your Handmade Goods

Pricing your goods is SO hard!

I know for me, I’m such a people pleaser, so if I had a choice I would probably just give everything away. But in the real world, it doesn’t work that way! I’ve got to get money for my work, or I won’t be able to keep going (and my husband will be super angry at me for going into more debt over yarn!)

There are a few things to consider before even thinking about pricing your items.


Knowing your market is super important when starting a business. It’s best to do some research to make sure this is really what you want to do.

First, you need to research what your potential customers will pay. This helps to make sure your items will be in demand. By searching for similar items on Etsy you can see what different stores are selling. This means people are buying!

Secondly, you need to find out what your competitors are charging. The best way to do this is a search for something you are interested in making on Etsy, or Amazon or wherever you are thinking of selling your items. This gives you a good idea of much you can make off certain items.

Researching your product also gives you the opportunity to determine your cost versus value. By checking out the competition you can make sure your prices fit in with the rest of the market. In my opinion, it’s a good idea to have items priced on what I call “the higher end of middle”.

This means I try to find the middle range price and set my prices just a tad bit higher. This way they are not the highest price out there, but I’m also not the cheapest.

When you price items on either end of the extreme people sometimes tend to have what’s called a ‘percieved value’. This means if you’re the highest price they tend to think you are “overpriced” and if you’re the lowest they tend to think your item is “cheap junk”.


Keeping track of your costs is very important when pricing goods. There are a lot of extra factors you need to think about when factoring in cost. For example, most people are only thinking about the materials used in making the product (i.e. the yarn used to make a scarf).

However, you also need to think about materials you use to wrap the scarf and the shipping box used to mail it. The shipping costs. The business card you leave inside the box. Did you use cute bubble wrap? Did you get custom gift boxes?

All of these items add up and they can add up quick!

Make sure you account for all the materials you used!

Changing Market

Keeping an eye on your market is very important. Trends change so fast in the world today. I would recommend following several other companies similar to yours. While I’m not telling you to copy everything they do, trends change and you want to make sure you stay up to date on your products so you aren’t left behind.

This helps you keep your items in demand and keep your customers coming back for more!

A basic formula for pricing goods

Pricing is probably one of the hardest parts of starting your own handmade business. People have the ability to purchase almost anything from factories these days and it makes it difficult for crafters to earn the money they deserve. My best advice is to not undersell yourself, we always do that! And it doesn’t benefit any of us. If you price your items fairly and are making a great product, your customers will come. It will be worth your efforts!

It takes a little bit of math to figure out how to price your items.

(Make cute graphic here!) - and Printable opt-in version!

A: How much did you pay for your materials?

B: Determine how much you want to be paid per hour?

C: How long did it take to make your product?

Then calculate, (B x C) + A = Wholesale price

Multiple this number by 2 to get your retail price.

Easy  Way

Enter my awesome friend Pam over at the Crochetpreneur!

This puppy does it all!

She came up with the most amazing pricing calculator I’ve ever seen! This tool is life changing and takes all the guesswork out of pricing crocheted or knitted projects. To get access to her calculator check it out HERE

And it’s cute too!

Here is how to use the Pricing Calculator:

  1. First, you need to decide how much you want to pay yourself (per hour). Enter this in the top blue box.

  2. Then, you need to determine your supply costs, time to produce 1 item, and any extra expenses you had. These are entered in the remaining 3 blue boxes.

  3. This will calculate a suggested price for both wholesale and retail. Look at these prices and compare them to the rest of your market. If they are comparable, then you enter your sale in the 2 pink boxes. One box is for wholesale price and the other for retail price. This will auto-populate the graph on the right to show your profits. The dark purple represents wholesale prices and profits while the lighter purple is retail.

  4. If you have decided you not to offer wholesale at all you can adjust your retail price to be slightly lower. This is done in the pink box towards the bottom on the line that read 'no wholesale'. By doing this your profit margin will be slightly lower, the chart will calculate exactly what you should be making per item.

And that's it! It's as simple as that! No actual calculations required!

And while I’m talking about it, Pam is the expert on getting your craft business off the ground, so if you are really serious about earning an income from your hobby take a look around her site, Crochetpreneur. She has some amazing in-depth advice and tons of freebies to get you on the ground running!

You may also be interested in reading Everything You Need to Prepare for a Craft Fair.

How do you charge for your handmade goods? Whichever way you chose, I hope these tips help you find the best option for you! If it does, I'd love to hear how you are using your calculator. You can email me at or tag me on social media with #thecarpoolknitter.

Kathryn O'Neil