How to Price Your Etsy Items + Handmade Goods

Today I’m talking all about Etsy pricing. In this video and post, I give my best tips on how to price your Etsy items and how to price your handmade items. I focus on calculating the true cost of your handmade goods and tips for determining the best price for your Etsy items. Feel free to watch the video while you read along, or refer back to this post when you need it!

Watch: How to Price Your Etsy Items

How to Price Your Etsy Items – Video Timestamps: 0:00

  • Cost of materials + supplies: 1:03
  • Cost of your time + labor: 3:52
  • Value of handmade items: 6:30
  • Confidence in your value: 8:15
  • Evaluate price of similar items: 8:58
  • Starting vs ideal price: 10:35
  • Getting comfortable with pricing: 14:00
  • If your items aren’t selling…: 15:17
  • Final thoughts: 17:46

How to Price Your Etsy + Handmade Items

Determining the price of your Etsy items and handmade items can be tricky. There is no ‘magic formula’ (if you know of one, let me know!) or one perfect solution that will work for everyone. Especially if you are new to selling, it’s important to first calculate the true cost of your products before you can find the best price to charge for it.

Calculating the Cost of Your Product (i.e. what it costs you to make it)

  • Price = cost of materials + cost of your time and your labor (“added value”)
  • Cost of materials and supplies: First, you need to consider the cost of all the tools and supplies needed to create the item itself. I recommend including the cost of any tools you purchased specifically for making this product. Also, include the cost of any shipping or packaging supplies specifically for this item. If you are making jewelry to sell, the cost of your supplies would include things like beads, wire, pliers, wire trimmers, pendants, etc. plus the cost of your packaging and shipping materials.
    • If you do not include the cost of your packaging and shipping materials, your actionable ‘cost’ will be lower than what it actually costs you to make and ship one item.
  • Cost of your time: This is the hardest area to cost and price, because it can’t always work out to equal an easy “minimum wage per hour” of work, as if you were working a typical hourly position. In addition to the time it takes to actually make the item itself, you also spend time creating the product listing, taking listing photos, packaging the item, and marketing it on social media. It’s difficult to keep track of all this time, because you aren’t necessarily “clocking in and out” when you’re working for yourself. And, the cost of one item probably won’t cover the total cost of your time, unless you are selling big-ticket items.
    • For example, if I spent two hours making a new laptop sticker, and I want to make $10 per hour, I can’t exactly go charging $20 for one sticker. But, the cost of your time may level out as you make and sell additional items.
    • This does not mean you should not account for the cost of your time and labor. Your ‘added value’ is your personal touch on the product, you creating this item, and you selling the item on your shop.
    • It may take some time and effort to get to the point where you are making a decent wage from your handmade items or to get to the point when it seems ‘worth’ your time from a strictly statistical perspective.
    • But, most people start creating handmade goods because they enjoy it not because they expect to get rich from it.
    • Etsy and handmade-selling is not a get-rich-quick-scheme. If that’s what you are looking for or expecting, you are in the wrong business.
  • Cost of similar items: If you are just starting out or expanding into a new product area, this is the best marker for whether your price is reasonable for this type of item. Use the cost of similar items on Etsy as a guideline, but never as a hard rule. When considering the price of similar items on the market, keep in mind that the size of a shop and other factors will make a huge difference in the final prices.
    • No two items are truly identical. No two shops are identical.
    • But, this is a good measure of knowing what customers are paying and willing to pay for similar items.
    • You may want to consider setting your price in the lower range when starting out. You can always increase your prices over time as your pricing skills become more accurate and as your shop gains sales and reviews (and therefore, credibility).
    • Price can be an indicator of quality and value. But not always. Keep this in mind that you may not want your products to be priced too low compared to similar items. And, you may not want your products to cost exceptionally more than similar items from other shops, unless there is a good reason or factor to account for the higher price.
  • The age and reputation of your shop: As I mentioned before, this is something to consider when creating your pricing formula and setting the prices in general for your shop. Customers may be willing to pay more for a similar item from a more established shop that has lots of positive reviews, than from a shop with 10 sales and no reviews.
    • I often set a slightly lower price to start out with a new type of item. Then, I slowly raise it over time as I make sales and gain positive reviews for my shop.
    • Consider the way you shop and things you consider before making a purchase. Do you always read shop reviews before buying? Are you willing to spend more from trusted / established brands than from new shops or for items with no or few reviews?
    • Setting slightly lower prices than your ‘ideal’ price can be a tool for new shops to help gain sales and reviews in those early days. Sales may be slow at first, but really work on creating the best possible product and best buying experience for your customers to get those happy reviews early on.
  • Price + making sales: I get lots of questions and comments on YouTube of new sellers wondering why their sales are slow or why they aren’t making sales. (See also: What to Do When Your Etsy Sales Are Slow) Price will not be the only reason your items are or are not selling. Consider all the factors. Do you have eye-catching, clear photos of your product? Do you have enough photos of your product to show it off to the customer? Do you have a clear description of the item? Are your title, description, and tags accurate to help customers find the product? Are you getting traffic to your shop? To this item? Is your processing time listed? Try to evaluate all of these areas to determine why your items aren’t selling or to find ways to improve your listings and see if that improves your shop traffic or sales.
  • Important notes: Creative handmade goods can be difficult to price. Again, Etsy is not a way to make huge money quickly. I have been selling for four years and I am not making a full-time income from Etsy. But, it is extremely rewarding to list and sell your handmade creations. Once your customers find you, they will be so impressed with the quality of your handmade items. You can always increase your prices over time as you gain experience and become more confident in your goods.
  • Good things take time. Remember to give yourself grace. Don’t sell yourself short! Handmade selling and Etsy selling success won’t happen overnight. But, you can continue to improve your shop, your products, your skills, and your confidence over time to be the best shop and seller you can be! I’m here to cheer you on and support you as much as you can. If you already started your dream shop, you are already doing more than some people will ever do.
  • Today is the best day to start. ‘Someday’ is not a day of the week.

Good luck, you got this!




I'm Kristen, a small business owner living in the sunny state of Florida. I blog about running my Etsy shop (Lemon and Lily Co.), small business tips, & lifestyle content. I'm all about community over competition & finding the joy in every day.

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