Pricing Your Handmade Crafts So Your Time and Materials Are Covered
Many people who knit, sew, quilt, carve or make pottery hear the same thing sooner or later: “You should sell those!” It is a kind compliment. But the first question that comes next is a hard one. What should you charge?
Price too low and you may end up working for pennies, or even losing money once the yarn and the fees are paid. Price too high and things may sit on the table. This guide walks through a simple way to land somewhere sensible, one step at a time.
Start with what one item really costs you
Before you think about what a buyer might pay, add up what it costs you to make one item. There are three parts.
1. Materials
Write down everything that goes into one piece: yarn or fabric, thread, buttons, wood, glue, finish, tags and packaging. If you buy in bulk, divide the cost by the number of items the batch makes. For example, if a $24 bag of stuffing fills 12 toys, that is $2 of stuffing per toy.
2. Your time
This is the part most crafters leave out. Time yourself making a few pieces and take the average. Then pick an hourly rate that feels fair to you. The pricing guide from Craftybase, a crafts inventory company, suggests a simple way to choose one: decide what you would like to take home in a month and divide it by the hours you expect to work. You do not have to pay yourself a high rate, but leaving time out completely means the price only covers supplies.
3. Small extras (overhead)
Overhead is the little stuff you use up over time: needles, a sewing machine’s upkeep, the table fee at a fair, a bit of gas to get there. Make a rough monthly total and divide by the number of items you make in a month. Even a quarter or fifty cents per item adds up.
Add the selling fees
Where you sell changes the price. Some examples:
- Etsy, as of October 2026, charges $0.20 to list an item, a 6.5% transaction fee on the item price plus any shipping you charge, and, for sellers with a U.S. bank account, a payment processing fee of 3% plus $0.25 per order. Check Etsy’s fee pages before you list, since fees can change.
- Craft fairs usually charge a booth or table fee. Spread it over the number of pieces you expect to sell that day.
- A local shop that sells your work for you may keep a share of each sale. Ask what it is before you agree.
Selling face to face with cash has the fewest fees, but you still have your time and travel to count.
Put it together: a simple pricing formula
Here is a plain version of the formula many craft pricing guides use:
- Materials + your time + overhead = your cost for one item.
- Add a markup on top of that cost so there is something left over. Craftybase notes that retail markups for handmade goods often fall somewhere between 100% and 300% of the base cost, depending on the item and the market.
- Add the selling fees for the place you plan to sell.
Here is a made-up example, just to show the math. Say a hand-knit hat uses $6 of yarn, takes 3 hours, and you choose $10 an hour for your time. Add $0.50 for overhead. Your cost is $6 + $30 + $0.50 = $36.50. That may already be more than shoppers at your local fair are used to paying, which leads to the next step.
Check your price against the real world
Look at similar items at fairs, in local shops and on sites like Etsy. Compare items that are truly alike in size, materials and quality. If your number is much higher than everyone else’s, you have a few choices:
- Make something that takes less time, like a simpler pattern or a smaller size.
- Buy materials more cheaply, for example on sale or in bulk.
- Look for buyers who value handmade work more, such as a juried craft fair instead of a flea market.
- Accept a lower hourly rate for an item you enjoy making, as long as you know you are doing it.
What you should try hard not to do is price below your materials and fees. That turns a hobby into a cost, not an income.
What could this pay for?
Results vary a lot by craft, area and season, so treat this as an estimate. If careful pricing left you with, say, $5 of profit per item after materials and fees, selling four items a month would come to about $20. That could help toward a basic streaming plan or part of a phone bill. It is a modest goal, and a good one to start with.
Taxes and benefits: a quick reminder
Money from selling crafts counts as income, even if you think of it as a hobby. The IRS says hobby income must still be reported, and it explains how it tells a hobby from a business. Keeping simple records of what you spend and earn will make tax time easier.
If you are under full retirement age and get Social Security, earnings from self-employment can count toward the yearly earnings limit. Side income can also matter for SSI, Medicaid or housing help. This is general information only. Please check your own situation with the official sources below or a tax professional.
More on Replace a Bill
- Opening a Small Etsy Shop for Your Knitting and Crafts
- Selling Home-Baked Goods: What to Know About Cottage Food Laws
- Step 2: Work Out How Much Side Income Your Bill Really Needs
