Wednesday, May 22, 2013

The Ultimate Guide to Pricing Your Products on Etsy

The Ultimate Guide to Pricing Your Products on Etsy |

Putting a price on your work is often one of the most intimidating first steps to selling on Etsy. Your price communicates your product’s value to customers. 

Instead of asking yourself what your product is worth, you may be tempted to ask yourself what customers will pay. With this mindset you are underestimating the thoughts of a savvy shopper looking for quality handmade goods.

Let’s take a look as some pricing principles that will ultimately guide you to the right price point for your products that will reflect the value of your work, allow you to offer wholesale pricing to retailers and provide you with a fair profit margin. 

I was at the cutting counter of a fabric store recently and recall a conversation I had with the sales person. It is not uncommon for them to ask me what I plan to do with the fabric I am purchasing so when I told her that I would be creating personalized bags for my Etsy shop she chimed in and told me that she had been thinking of opening her own Etsy shop.

She explained that she likes to create things and her husband had been encouraging her to sell them. She went on to say that she thought about pricing them just $2 above the cost of materials. 

I’m not sure how she came up with that price point but it certainly wouldn’t be long before she started to question if she’s being a good boss to herself. 


Before you can establish a price for your items, you’ll need to calculate the cost of your materials and labor. These are the two important factors you’ll be using in a pricing formula later. 

Materials: Break down each of your items into all the components they are made of. Don’t forget the small things like thread and labeling tags.

Consider keeping a record of price breakdowns for all of the materials you commonly use. Referring to a notebook or google doc with each of these per-calculated prices will help you systemize this process as you add new products to your shop.

Labor: I know….this is a trick one. 

What would you be willing to pay someone to do the work you are doing? Would they consider that fair pay? Be a good boss to yourself, do some research if you’d like and pay yourself what you are worth.

If an hourly wage is too difficult for you to figure out then consider the monthly or yearly salary you’d like to pay yourself and calculate the number that way.


Pricing can be a challenge but there is a formula you can use as a starting point that gives you far more than just $2 above the cost of materials.

(Materials + Labor) x 2 = Wholesale x 2 = Retail

You might be asking why we are looking at wholesale pricing when this it's not even on your radar right now.
The reason is simple! 

Someday, someone will send you an inquiry about selling your products wholesale and you’ll wonder how in the world you can offer wholesale prices at your current price point. 

Now is the time to set yourself up for success by pricing your products appropriately and being ready for that wholesale opportunity. 

Also, by doubling the sum total of your materials and labor you are helping to cover the costs of additional business expenses and your profit. 

Let’s look at an example: 

If your products costs you $5 in materials and you pay yourself $15 for the time it took you to make it then your wholesale price is $40 and your retail price is $80.


Using a pricing formula is just the beginning. 

After you’ve been on Etsy for awhile you’ll be able to see what price points are working and what may need to change. 

If your sales are not what you’d like them to be, there are many more factors to consider than just your prices.
You may need to work on your tags and titles so you are getting found by your ideal customer. 

You may need to work on your photos and product descriptions so your customers get a better understanding of what you are selling and how it matches what they are looking for. 

You may be under pricing your items and causing customers to ask, "what's wrong with this product?"


A few months after I started selling my personalized bags I was so overwhelmed with orders that I couldn’t keep up. The pace of working long hours every day, every weekend was exhausting so I knew something needed to change.

Although I feared that the bottom would fall out of my business, I took the scary leap of raising my prices. I thought if anything, I would be giving myself a raise for all the hard work I was doing. 

What happened….. instead of losing business, I increased my business and learned a lot about pushing against my fear of pricing my products. 

Just think of the possibilities of what could happen if you turned your thoughts around from discounting your prices for the masses to increasing your prices to reflect the value of its worth for your ideal customer. 

What message are you sending your customers? Remember, your price communicates your product’s value.

What pricing formula do you use and how is it working out for you?






So you are probably wondering how to get started with your own pricing. As I suggested to the young lady at the fabric store......check out the resources etsy has to offer you. It's all great information. I think the one online training that really hit home for me was the Etsy Success video on The Basics of Pricing. When you click the link you will need to scroll through the various topics to find the exact video.

Something I learned early on with my shop is that it helps to have a variety of price points so you can offer something for everyone. It was January of 2012 that I started to understand the value of this but wasn't sure how to implement it. I didn't have plans to create a more expensive item but learned from other wedding vendors that creating collections of bridesmaid bags would create the higher end of pricing for me. For the small budget item I created my coin purses. So now I have a more well-rounded shop with room to grow.

I want to encourage you to be brave when pricing your items to sell. I know it takes courage! I really do! Your hand crafted item will add value and beauty and joy to someone's life. They aren't looking for something manufactured they can purchase at Target or Walmart.  They are looking for something lovingly handmade by you!


  1. very good post .. it's tricky isn't it!

  2. Excellent advice on a very tricky subject. Thank you for writing this post. Happy Hearts are Creative Hearts...

  3. Thank you both for your feedback. is a very tricky topic to address so I'm glad you found this to be helpful!

  4. Reading your story made me think of when I first opened my Etsy shop. Just like you, I literally gave away my product. I felt as if I was not worthy of charging my customers for my hard work, so I just based my prices on what was being commercially sold out there ( think Walmart .. eeek!). Now, after much research and a boost of confidence from my customers, I feel right about pricing my items.

  5. Getting to a place of confidence is quite a journey! Good for you!! You are worth it!!

  6. Thank you for your post! I have a super small etsy shop that I'm working on stocking but I do mostly custom work. I know that I way underprice and need to work on that. I love the reminder that it takes courage.

    I found your blog through Karley. Beautiful work!!

    1. I'm so glad you found me today Ellie! You have a beautiful blog and a wonderful looking etsy shop. I also noticed that you are very close to where I am. Perhaps we have crossed paths and didn't even know it. Best of success to you!!


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