What is the difference between markup and margin for handmade sellers?

Markup is calculated on your cost; margin is calculated on your selling price. A 100% markup means you doubled your cost, but that is only a 50% margin — they are not the same. For example, if your cost is $5 and you charge $10, your markup is 100% but your margin is 50%. Margin is a better measure because it tells you what percentage of every sale you actually keep.

How does wholesale pricing work for handmade products?

Retailers use keystone pricing: they expect to buy your product at roughly 50% of your retail price and sell it at full price. The standard model is: your cost × 2 = wholesale price, wholesale price × 2 = retail price, and your cost × 4 = the minimum retail price that makes wholesale viable. If you sell direct to consumers at the same retail price as your stockists, you are undercutting them — retailers expect that price point to be protected.

What are the most common pricing mistakes handmade sellers make?

The three most common pricing mistakes are: (1) Not counting your own labour — your time is a real cost, and if you do not include it you are effectively paying yourself nothing. (2) Using the packet price instead of the per-unit cost — a $20 bag of wax that makes 8 candles costs $2.50 per candle, not $20. (3) Copying a competitor's price — if they are undercharging, matching their price means you will be too.

When should I review and update my product prices?

You should review your prices when an ingredient cost increases by more than 5–10%, when you change your batch size significantly, when you change your packaging, or if it has been more than 6 months since your last review. Your true cost per unit is also your Cost of Goods Sold (COGS) for tax purposes — keep a record of your cost breakdowns, as COGS is deductible and may be required by tax authorities.

Free Product Cost Calculator for Handmade Sellers

Step 1 of 5

Product & Batch

This calculator finds your true cost per unit (ingredients, packaging, your time, and platform fees) and suggests a retail price range based on your real numbers. Takes about 5 minutes.

Product name What do you call this product? Please give your product a name.

Units per batch How many finished products does one batch make? Enter how many units one batch makes.

Ingredients

+

Packaging

+

Your time

+

Fees

=

True cost

Takes about 5 minutes. No account needed.

Step 2 of 5

Add your ingredients

List everything that goes into your product. We'll calculate the true cost per unit.

💡 Buying in bulk? How the cost calculation works

Enter what you actually paid per pack and how much you used. We'll work out the per-gram cost and multiply it by your batch amount. Buying larger quantities lowers your cost per unit automatically.

IngredientAmount used Cost used ⓘ

Ingredient cost per unit: $0.00; Packaging, labour & fees still to come.
Total for batch: $0.00
Share of total cost per unit: —

Step 3 of 5

Packaging

Include everything you need to package one unit: jars, lids, labels, boxes, tissue paper.

💡 Buying packaging in bulk? How the cost calculation works

Enter the price per individual item under Cost per item, or use the Bulk purchase (optional) helper below each row: enter how many you bought and what you paid in total. We'll calculate the per-unit cost automatically. Buying in bulk lowers your per-unit packaging cost.

Item Cost per item ⓘ Cost used ⓘ

Add one row per component: jar, lid, label, tissue paper, etc.

Packaging cost (per unit): $0.00; Cost of all packaging for a single product.
Total for batch: $0.00
Share of total cost per unit: —

Step 4 of 5

Labour & Fees

Most makers undercharge because they forget to value their own time. Don't skip this step.

Your Time

Your hourly rate ($) What is your time worth per hour?

Hours per batch Total time to make one full batch.

Labour cost per unit

Updates as you type above

$0.00

Overhead (optional)

Business costs not tied to a single product — studio rent, utilities, equipment wear, insurance, software. Every unit you make uses a share of these, so they belong in your true cost. Leaving them out is one of the most common reasons handmade sellers underprice.

Just starting out? It's fine to skip this for now — you can always come back and add it once you have a clearer picture of your running costs.

Total units you make per month — all products combined Your overhead is shared across everything you produce, so include every product type

How do I work this out? ▾

Add up every unit you make across all your products in a typical month — deodorant, shampoo bars, lip balms, everything. Your studio rent and utilities don't care which product is on the bench; the cost is shared equally across all units you produce.

Example: 80 deodorants + 60 shampoo bars + 40 lip balms = 180 total units/month.

If your output varies month to month, use a 3-month average: add the last three months' totals and divide by three. New sellers can use a planned typical month and update it as production grows.

What counts as overhead? See examples ▾ Show

Space & Utilities

Studio / workshop rent + Add Home office + Add Storage unit + Add Electricity & gas + Add Internet + Add Phone + Add Water + Add

Equipment

Equipment depreciation + Add Maintenance & repairs + Add Tool replacement + Add

Insurance

Product liability + Add Public liability + Add Equipment insurance + Add Business interruption + Add

Software & Subscriptions

Accounting software + Add Inventory software + Add Design software + Add Email marketing + Add Website platform fee + Add Other subscriptions + Add

Professional Services

Accountant / bookkeeper + Add Legal fees + Add

Banking & Finance

Bank account fees + Add Credit card annual fee + Add Loan interest + Add Credit card interest + Add

Marketing

Market stall fees + Add Advertising + Add Photography equipment + Add

Learning & Development

Course fees + Add Industry memberships + Add

Cost nameMonthly costPeriodPer batch

Platform & Payment Fees

What's the difference between platform fee and payment processing? ▾

Platform fee = the marketplace's cut (e.g. Etsy takes 6.5% of every sale). Payment processing = what the payment handler charges (e.g. Stripe 2.9%). Both come out of what you receive, so both belong in your true cost.

Platform fee (%)

Payment processing (%)

Show common platform fee rates ▾ Show

Platform	Transaction fee	Payment processing	Notes
Etsy	6.5%	3% + $0.25	Most common for handmade sellers
Shopify (Basic)	0%	2.9% + $0.30	With Shopify Payments; no transaction fee
Shopify + Stripe	2%	2.9% + $0.30	External payment processor
Amazon Handmade	15% referral	Included	Processing included; enter 15 + leave processing at 0
Faire (wholesale)	15% marketplace	1.9–3.5% + $0.30	All marketplace orders. Faire Direct (your own customers) is 0%. Processing fee varies by payout speed.
WooCommerce + Stripe	0%	2.9% + $0.30	Self-hosted; only Stripe processing applies
PayPal	—	3.49% + $0.49	Higher flat fee than Stripe
Square	—	2.6% in-person / 3.3% online	In-person rate applies pre-filled. Online is higher at 3.3% + $0.30.

Additional fixed fees

Add any recurring fixed costs per batch: marketplace listing fees, packaging inserts, or shipping supplies.

Fee nameAmount per batch ($)Per unit

Shipping & Fulfilment

If you absorb shipping costs, they're part of your true cost per unit. Don't leave them out.

Step 1 — Shipping model

No shipping cost added to your true cost — customers cover it.

Total cost (per unit): $0.00; All costs after platform fees.
Labour (per unit): $0.00
Custom fees (per unit): $0.00
Shipping absorbed (per unit): $0.00

Wholesale analysis included in your results — on the next page you can toggle on a wholesale viability check to see whether your pricing supports selling to boutiques and stockists.

Product cost report: your product

You're done. Here's your full cost breakdown.

Step 5 of 5

Your Results

Here's the full breakdown for your product.

Your inputs are saved in this page URL Bookmark or copy the link to return to these results later.

How are you selling?

✓ Always on

Direct to consumer Etsy, craft fairs, your own website (included in all results)

True cost per unit

$—

all costs included

★ Minimum recommended price

$—

— margin

Based on a 60% margin target. Adjust below ↓

Your costs are all zero. Go back and add ingredients, packaging, and labour to see real numbers.

Ingredients$——

Packaging$——

Labour$——

Overhead & Fees$——

Total per unit$—

What price do I need?

Set a margin goal → find your minimum price

I want a % margin (10–90)

Minimum price for 60% margin

$—

Complete steps 1–4 first.

Test my current price

Enter what you're charging → see your actual margin

I'm selling at $

Your margin at that price

—

Enter a price above to see your margin.

Competitive

$—

40–50% margin

★ Recommended

Premium

$—

55–65% margin

Luxury

$—

65–75% margin

ChannelMarkupMarginYour price

Etsy / online shop100–200%50–67%$—

Craft fairs150–250%60–71%$—

Wholesale (to retailers)50–100%33–50%$—

Boutique / consignment200–300%67–75%$—

Retailers expect ~50% of your retail price (keystone pricing). For wholesale to be sustainable your retail needs to be at least 4× your true cost.

Your true cost per unit$—

Minimum retail (supports wholesale)$—

Your wholesale price at that retail$—

Your profit per wholesale unit$—

Markup vs. margin: what's the difference?

They look similar but give very different numbers. Mixing them up is the most common pricing error.

▾

Markup is calculated on your cost. Margin is calculated on your selling price.

Markup = (Price − Cost) ÷ Cost | Margin = (Price − Cost) ÷ Price

A 100% markup means you doubled your cost. But that's only a 50% margin.

Your numbers: Your true cost is $—.

At a 100% markup you'd charge $—, keeping $—, which is a 50% margin.

At your premium price of $—, your markup is —% and your margin is —%.

How wholesale pricing works

Retailers expect 50% of your retail price. Here's what that means for your numbers.

▾

Retailers use keystone pricing: they buy at ~50% of retail and sell at full price.

Cost × 2 = Wholesale price | Wholesale × 2 = Retail price | Cost × 4 = Minimum retail

Your numbers: Cost is $—.

Wholesale floor: $— (cost × 2)

Min. retail for wholesale: $— (cost × 4)

Common pricing mistakes

The three errors most handmade sellers make, and how to avoid them.

▾

1. Not counting your own labour. Your time has a real value. Include it.

2. Using packet price instead of per-unit cost. A $20 bag of wax that makes 8 candles costs $2.50 per candle, not $20.

3. Copying a competitor's price. They might be undercharging. Price from your own cost structure.

When to review your prices

Costs change over time. Here's when to recalculate before your margin disappears.

▾

An ingredient cost increases by more than 5–10%
You change your batch size significantly
You change your packaging
It's been more than 6 months since you last checked

COGS note: Your true cost per unit is your Cost of Goods Sold for tax purposes. Keep a record.

Your numbers in action

Complete steps 1–4 to see a worked example with your actual costs.

Track costs automatically with Batchforja

Ingredient prices change. Batchforja alerts you the moment price changes eat into your margin. No spreadsheet required.

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