Price handmade products by adding materials, your labour at a real hourly rate, and overhead, then applying a markup. Most makers skip the labour line, which is the single biggest reason craft businesses run at a loss without realising it.
The four parts of a fair price
Materials. Everything consumed by one finished item, including the packaging it ships in and a realistic allowance for waste and offcuts.
Labour. The hours it takes to make one unit, multiplied by an hourly rate you would actually accept. Not the leftover after everything else, but a real wage. This is the line that gets skipped.
Overhead. Studio costs, tools, software, listing fees, the share of your monthly expenses each item should carry.
Margin. The profit that lets the business grow rather than merely survive.
The Handmade Pricing Calculator puts these together and shows both a wholesale and a retail price.
Why the number comes out so high
Because you were undercharging. That is uncomfortable to hear and it is usually true.
A piece that takes 90 minutes at $20 an hour carries $30 of labour. Add $6.50 of materials and $2 of overhead and your true cost is $38.50 before a penny of profit. If you have been selling it for $35, every sale has been costing you money and the busier you get the worse it becomes.
Choosing your hourly rate
Start with what you would accept for doing this same skilled work for somebody else, and never go below your local minimum wage. Raise it as your skill and your demand grow. A rate you resent is a business you will eventually abandon.
Do you need a wholesale price?
Only if you plan to sell through shops. The standard approach doubles the true cost to reach wholesale, then doubles again for retail. That keeps room for a stockist to take their own margin without undercutting your own storefront.
If you sell direct only, one markup is enough. Doubling twice for a direct-only shop will price you out.
Then subtract the platform
Your price is not your income. On Etsy, roughly 11 to 15 percent of the order goes to fees before advertising, and the transaction fee applies to shipping as well. Run your finished price through the Etsy Fee Calculator to see what actually lands in your account, and read how much Etsy takes per sale for the full breakdown.
What to do if the price feels too high
Three honest options. Make it faster, which lowers the labour line legitimately. Sell to a market that values the work, rather than competing with mass production on price. Or discontinue the item, because some products simply do not support a fair wage at any price a buyer will pay.
What you should not do is quietly pay yourself less and call it a hobby, unless it genuinely is a hobby. The whole point of the calculation is to make that choice a decision instead of an accident.