What to Charge for Your Etsy Products

If you're a crafter or artisan of any kind and haven't heard of Etsy yet, you're missing out on a load of fun and opportunity. This is the Indie Marketplace, the holy shrine of all things handmade and for sale on the Internet. Not only is the site nice to look at and easy to use, but it makes it really simple for even those with no technical know-how to get their foot in the door selling their own handmade products.

The only thing that stops most people from jumping right in and selling their crafts or art on a site like Etsy is that they're confused by the fees ... and what they should charge.

Before we get into the real "meat" of this guide, let me state this: never under-charge your work. Etsy isn't like eBay. Customers are looking for something they can see is quality, something they'll be proud to own. Since they can't actually pick the product up and look it over, everything about your listing is going to come into consideration when deciding quality - and the kicker is going to be the cost. Far more than over-charging, under-charging for your handmade crafts or art will turn a potential buyer away. If you take pride in your work, you'll charge appropriately for it, and Etsy consumers expect that.

Pricing on Etsy: Determining Costs and Fees

Before you can come up with a good, fair price for your handmade product, there are several costs that you're going to have to figure out. These will go into an equation that determines a very fair retail price, and then a fair Etsy price.

As we go along, I'll throw up the work as a progressive "spreadsheet" that represents an actual example.

Cost of Materials

First, you'll need to figure the cost of materials on your product. For example, I'll use a product I've been working up for a craft fair: thread boxes.

One ball of size 10 crochet cotton costs about $5 (rounded up); I use white, green, and pink in the basic box. From each ball of white, I can create at least 30 boxes. From the green and pink, at least 80. So we'll take $5.00 and divide it two separate times - once by 30, and by 80 (which we can use twice). This results in .17 per box in white, and .07 per box in both pink and green. The only other thing on the boxes is a single metallic bead in the center of each flower. Each pack of beads costs about $2 and contains 120 beads, so I wind up with .02 when I divide these numbers (because I only use 1 bead per box).

So far, my spreadsheet would look like this:

Materials: (Cost per box)
Size 10 Crochet Cotton - White ...... .17
Size 10 Crochet Cotton - Green ...... .07
Size 10 Crochet Cotton - Pink ...... .07
Silver Beads ...... .02
Total Materials Cost: .33

Cost of Labor

This one is tricky for most people, but what it comes down to is how much you feel your work is worth per hour. In other words, if you were to apply for a job creating the crafts or art you're making, what is the minimum you would accept per hour? In my example, I'll say that I feel my worth is about $10 per hour. Not making a killing, but it's well above minimum wage and we'll just go with it.

After you decide your hourly worth, you'll need to multiply or divide that per-hour amount by how much time it takes you to complete your handmade product. So continuing my thread crochet box example and my stated hourly figure of $10, I would need to multiply my hourly wage by 1 1/2, as it takes me approximately 1 1/2 hours to complete each thread crochet box.

My spreadhseet would enlarge to show this cost:

Materials: (Cost per box)
Size 10 Crochet Cotton - White ...... .17
Size 10 Crochet Cotton - Green ...... .07
Size 10 Crochet Cotton - Pink ...... .07
Silver Beads ...... .02
Total Materials Cost: .33

Labor: (Cost per box)
1.5 hours at $10/hour ...... 15.00

Listing & Sales Fees

This is the final step that you'll need to work out, and it honestly can be tricky. Paypal is the method of payment through Etsy, and they charge a different percentage of what you receive based on how much money the person sending you payment sends each month, and a few other factors. Etsy is a little more straight-forward, thankfully.

To make things a little bit easier, we're going to work off of averages. The average Etsy listing fee is .20, and the average Etsy sales fee is another .50 at the high end. Then, we'll figure that Paypal will charge a 1.00 fee (on the high end, again).

So our spreadsheet would round out looking like this so far:

Materials: (Cost per box)
Size 10 Crochet Cotton - White ...... .17
Size 10 Crochet Cotton - Green ...... .07
Size 10 Crochet Cotton - Pink ...... .07
Silver Beads ...... .02
Total Materials Cost: .33

Labor: (Cost per box)
1.5 hours at $10/hour ...... 15.00

Fees: (Cost per box)
Etsy Listing Fee ..... .20
Etsy Sales Fee ..... .50
Paypal Transaction Fee ..... 1.00
Total Fees: ..... 1.70

Pricing on Etsy: Setting Your Price

Let me state right now that the pricing model which follows won't work for wholesale. If you create your handmade items for wholesale sales, you'll need to discount your overall price based on the fact that you're selling a lot of items at once. Often, people who do this will just skip the Cost x 2 step that determines retail below.

Using your spreadsheet, you'll want to plug the numbers in like so:

1. Materials + Labor = Cost
2. Cost x 2 = Retail
3. Retail + Fees = Etsy Price, per item

So, using my final figures from my spreadsheet, I would wind up with the following:

1. .33 + 15.00 = 15.33 (Cost)
2. Cost x 2 = 30.66 (Retail)
3. 30.66 + 1.70 = 32.36 (Etsy List Price, per box)

To wrap up, let me again stress the importance of being honest with yourself during this process. If you're worth $30 an hour, charge it. Never ever discount the true cost of your materials or labor; quality materials are a must for quality work, and your customer will appreciate the difference.

In other words, don't underestimate yourself. Be true to your creativity and originality, and you'll never feel cheated.