Price each item from its full cost, then make sure the price still works after Etsy's fees. ProfitDrawer's candle business guide shows the method: $8.50 of materials, time and overhead, plus a 40% margin, is $11.90; dividing by 0.90 to cover an example 10% in selling and payment fees gives $13.22, rounded to $14 plus shipping. Use Etsy's current fee schedule and your own costs; these are example numbers.
The same steps work for any handmade product:
- Materials per item: cost a whole batch and divide by the number of items it makes.
- Your time: batch hours times the hourly pay you want, divided by items.
- Overhead share: tools, testing, photos and marketing per item.
- Margin: a percentage on top of cost.
- Fees: divide by (1 minus your total fee rate), because fees come out of the sale price. Look up the listing, transaction and payment processing fees that apply to your shop on Etsy.
- Shipping: charge it, or build it into the price if you offer free shipping.
Then check the result: price minus fees minus cost should leave a profit on top of your own pay. In the candle example that is $4.10 profit plus $2.75 of pay.
Keep fees in their own expense category in your books, separate from materials, so you can see what each sale really leaves. Wholesale prices must still cover your full cost.
Source: How to Start a Candle Business (From Home, Step by Step) · Updated
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