Handmade Goods Price Calculator

How to Calculate The Price For Your Handmade Goods

Our calculator is designed to be simple and easy to use. It covers:

• your base costs of time
• salary
• materials

It also allows you to input a desired profit margin on top.

We hope this calculator helps you make more money for your handmade goods business.

Please input below:

Learn more about starting a handmade goods business:

Where to start?

-> How much does it cost to start a handmade goods business?
-> Pros and cons of a handmade goods business

Need inspiration?

-> Other handmade goods business success stories
-> Examples of established handmade goods business
-> Marketing ideas for a handmade goods business
-> Handmade goods business names

Other resources

-> Handmade goods business tips

More Tips On Pricing Your Handmade Goods

How To Price Your Handmade Goods

One of the most challenging aspects to starting a handmade goods business is determining how much to charge for your handmade goods.

When businesses under-price their product, this can be extremely detrimental to their bottom line and reputation.

Often times, businesses under-price their products to drive demand and volume, but that last thing you want is for customers to view your product/service as "cheap." Additionally, this can have a big impact on the type of customer you attract, which can be difficult to recover from.

On the other hand, when businesses over-price, this tends to be just as damaging to the business.

When customers buy, it's likely that they will explore the internet and look at other competitors to ensure they're getting the best value + deal. This is why it's so important that you research your competition and understand where you land in the marketplace.

Here are some factors to consider when pricing your product:

Understand your customer

It's important that out of the gates, you identify the type of customer you want to attract and how much they're willing to pay for your service. One great way to do this is by surveying your customers. Here are some important items you'll want to takeaway:

• Customer demographic: Age, gender, location, etc.
• Buying habits of your customer: What they buy + when they buy
• Level of price sensitivity with your customer

All of these segments will help you identify the type of customer you're attracting and how to price your product accordingly.

Understand your costs

When pricing your handmade goods, it's critical that you first identify all of your costs and consequently mark up your handmade goods so you can factor in a profit.

The actual cost of your handmade goods may include things like:

• The actual cost to make the product (ie. raw materials, supplies, manufacturer).
• Shipping + overhead fees
• Rent
• Operating costs to run your business

You may want to consider creating a spreadsheet with every single expense involved in operating/owning your business. This will give you an idea as to what you need to generate in order to at the very least, break-even and will help you price your products to factor in a profit.

Create revenue goals

When determining the price of your handmade goods, you'll want to create goals for revenue + how much profit you want your handmade goods business to make.

This process is simpler than you may think:

1. Think about your breakeven cost (by completing the above step).
2. Create a revenue goal based on your break-even cost
3. Evaluate the # of items you plan to sell in a given period (make sure this is a realistic number)
4. Divide your revenue goal by the number of items you plan to sell

This figure will help determine your estimated price per product in order to meet your revenue goals.

Evaluate your competition

The last piece in determining how to price your handmade goods is by simply looking at your competition.

The best way to do this is by finding like-minded businesses that offer product(s) with similar perceived value. Then, you can compare prices of the different businesses and determine where your handmade goods fits best in the marketplace.

All of these factors play an equal part in pricing your handmade goods, so it's important you evaluate each one individually to come up with an accurate price that will help optimize your business from the start.

Case Study

Lauren Costanza, founder of Bluminary provides us with a detailed spreadsheet of all of her costs associated with running her business:

I knew this would be a self-funded adventure, and I set aside $3,000. During the first three months, I had a detailed spreadsheet where I tracked where the money was going and what was going toward products versus researching and developing new products.

The spreadsheets involved columns and rows of numbers to craft a budget and gain an understanding of how much would need to be invested at each stage of the process - from gathering supplies to building a website, and shipping materials.

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Lauren Costanza, on starting Bluminary ($500/month) full story ➜

Examples of a successful handmade goods business:

. Batch ($1.8M/year)

Samuel Davidson (from Nashville, Tennessee, USA) started Batch about 10 years ago.

. PortraitFlip LLC ($540K/year)

Sunny Choudhary (from Pune, Maharashtra, India) started PortraitFlip LLC about 6 years ago.

. Just Artisan ($120K/year)

Marcello De Lio (from Mississauga) started Just Artisan over 3 years ago.

. Humble Blades ($24K/year)

Christopher Sofia (from Austin) started Humble Blades almost 8 years ago.

. With Love From T To You ($12K/year)

Theresa Healey (from Hopewell, New York, USA) started With Love From T To You about 6 years ago.

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