Pricing Is a Business Skill, Not a Guess

Most makers begin by charging whatever feels comfortable, usually by glancing at what similar sellers charge and shaving a little off. That approach rarely survives contact with a real order book. Handmade pricing needs to do three jobs at once: cover what you spent, pay you for the hours you gave, and leave something behind for growth. Get those three right and your prices stop feeling arbitrary — they become a decision you can defend, explain and repeat.

The good news is that you do not need an accountant or a finance degree. You need a notepad, a calculator and the willingness to write down numbers you would rather ignore.

Cost Your Materials Properly

Material cost per item, not per pack, is where most pricing errors hide. If a bag of 100 jump rings costs £12, each ring costs 12p — and a necklace using six of them carries 72p of findings before you have added a clasp, chain or charm. Break every supply down to a per-unit figure and keep the workings in a notebook or spreadsheet so you never have to redo the maths.

• Consumables count. Thread, glue, solder, sandpaper, blades, masking tape, kiln firing and even the electricity for a heat press all belong in the cost of a product.
• Packaging is part of the product. Boxes, tissue, ribbon, tags, stickers, care cards and postal mailers add up quickly — often 80p to £2 per order.
• Build in waste. Add 5–10% to cover spoiled fabric, failed glaze batches, broken clasps and test pieces. You paid for those too.
• Never round down. Rounding a material cost down feels modest, but it quietly eats your margin on every single sale.

Pay Yourself for Your Time

Your hands are the most valuable equipment in the workshop. Set an hourly rate that reflects skill rather than sentiment — somewhere between £12 and £20 per hour is a reasonable starting range for a competent maker, with more for specialist techniques. Then time yourself honestly. Make three of the same item, average the results, and write that figure down.

Remember that making is only part of the job. Photographing, writing listings, replying to messages, packing orders, sourcing supplies and standing behind a market stall are all work. Some makers handle this by tracking bench time separately and adding a flat 20–30% admin allowance. Others build a slightly higher hourly rate to absorb it. Either way, do not treat admin as invisible: at ten orders a week, it can easily amount to a full working day.

Overheads: The Costs That Creep

Overheads are everything you pay for whether or not anything sells. Studio rent, storage, insurance, website hosting, marketplace commission, card payment fees, software subscriptions, stall fees, travel to fairs and the gradual replacement of equipment all sit here. Tally them for a typical month, then divide by the number of items you usually sell. If you shift roughly 40 pieces a month and overheads run to £200, that is £5 per item before you have made a penny for yourself.

Do not forget selling fees. An online marketplace may take around 6.5% commission plus a payment processing charge, and a card reader at a fair takes a slice too. On a £30 sale you could lose £3–£4. Build that percentage into your price rather than discovering it later.

A Pricing Formula You Can Trust

Add together materials, your time and your overhead share. That total is your break-even cost — the price at which you work for nothing extra. From there, apply a multiplier to create profit and a buffer for growth. A multiplier of 2 to 2.5 on the true cost is a common and workable target for retail.

Here is a simple worked example. A scented candle uses £4.50 of wax, wick, fragrance and jar. Thirty minutes of making at £15 per hour is £7.50. Packaging adds £1.20 and overheads add £1.80. Total cost: £15.00. Multiplied by 2.2, the retail price lands at £33.00 — round it to £32.50 or £34.00 and you have a price that holds up.

The same logic protects your wholesale side. If retail sits at roughly double your wholesale price, you can sell to shops at 50% and still cover costs. Undercutting a competitor who has priced badly only guarantees that two businesses struggle instead of one.

Review, Adjust and Raise Prices Calmly

Costs move. Wax rises, postage changes, your hourly rate should climb as your skills do. Review your prices every six to twelve months, or sooner if a key material jumps in price. Keep a simple record of which lines sell well and which quietly lose money — a bestseller at the wrong price is still a problem.

• Give notice. For wholesale customers, 30 days' written notice of a price change is fair and professional.
• Be brief about it. "Our prices increase from 1 March to reflect higher material costs" is enough. No lengthy apology required.
• Grandfather loyal buyers sparingly. A short grace period for regulars is generous; indefinite old pricing is a slow leak.
• Raise prices on new stock first. It is the gentlest way to test a higher figure in your market.

Steady growth comes from small, deliberate adjustments rather than dramatic gestures. Price with care, revisit the numbers often, and your craft business will have the breathing room to keep doing what you love.