The whole pricing question in one place
“What should I charge for this?” is the question every product seller and service provider asks, and most pricing tools only answer half of it. Margin calculators assume you already know your costs. Markup calculators ignore overhead and platform fees. Neither helps the Etsy seller wondering whether a £24 candle actually makes money after materials, her time, Etsy’s fees and the box it ships in.
This calculator builds a price from the ground up: materials, labour, overhead share, packaging and delivery, platform or payment fees, and your target profit margin — in that order. It is the end-to-end “what should I sell this for” flow, and it shows every layer so you can see exactly where the money goes.
Estimate only, not financial advice. Price = costs / (1 - margin). Tax is added on top of the recommended price.
How to use it
- Enter your direct costs per unit: materials, ingredients or wholesale cost.
- Enter your labour: hours per unit × your hourly rate (use the freelance rate calculator if you don’t have one).
- Enter your overhead share per unit: monthly overhead ÷ units you sell per month.
- Add packaging, delivery and any platform or payment fees (as a percentage or flat amount).
- Set your target profit margin. The tool returns the selling price that achieves it — and shows the cost breakdown as a stacked summary.
What it calculates and how the formula works
| Layer | How it is handled |
|---|---|
| Direct costs | Added at face value |
| Labour | Hours × hourly rate, added at face value |
| Overhead per unit | Monthly overhead ÷ monthly units, added at face value |
| Packaging & delivery | Added at face value |
| Platform/payment fees | Applied as % of the selling price (solved iteratively) or flat amount |
| Target margin | Price = total cost ÷ (1 − target margin) |
The fee handling is the subtle part: a 10% platform fee is 10% of the final price, not 10% of your costs. The calculator solves for the price where, after the fee is taken, your target margin on the remainder still holds. Doing this by hand is error-prone; the tool does it exactly.
Assumptions:
- Overhead is allocated evenly per unit. If you sell multiple products, allocate overhead by revenue share or time share rather than splitting it equally.
- Fees entered as percentages are assumed to apply to the final selling price (the standard for marketplaces and payment processors).
- Target margin is margin on price (profit ÷ selling price), the standard business definition.
Worked example: the Etsy candle
Jess sells soy candles on Etsy from Manchester. Her numbers per candle:
- Materials (wax, fragrance, jar, wick, label): £4.80
- Labour: 0.25 hours × £20/hour = £5.00
- Overhead: £600/month ÷ 300 candles = £2.00
- Packaging and postage share: £2.20
- Etsy + payment fees: ~12% of selling price
- Target margin: 35%
Cost before fees and margin: £4.80 + £5.00 + £2.00 + £2.20 = £14.00. The calculator solves for the price P where (P − 12% fee − £14) ÷ P = 35%:
- 0.88P − £14 = 0.35P → 0.53P = £14 → P = £26.42
So the viable price is about £26.42 (she lists at £26.50). Check: fee £3.18, costs £14.00, profit £9.32, margin 35.2%. Without the tool, Jess had been selling at £19.99 — where after the £2.40 fee and £14 costs she kept £3.59, a 18% margin that left no room for anything to go wrong.
Important considerations and limitations
- Your labour is a cost. The most common pricing error among makers and freelancers is valuing their own time at zero. If you would not do the work for someone else at that hourly figure, it does not belong in your pricing either.
- Fees are bigger than you think. Marketplace fees, payment processing, currency conversion and promoted listings stack up. Add every percentage that touches the transaction.
- The maths gives a floor, not a strategy. £26.42 is the lowest price that hits Jess’s targets. Brand positioning, perceived value and competitor prices may justify more — charm pricing (£26.50 vs £26.42) is fine as long as the margin survives it.
- Overhead allocation is approximate. Splitting £600 of monthly overhead across products is inherently judgemental. Revisit it quarterly as volumes change.
- Browser-local: your cost and pricing data never leaves your browser.
Frequently asked questions
How do I price handmade products to sell?
Add up every cost per unit (materials, your labour at a real hourly rate, overhead share, packaging, delivery), add platform and payment fees, then divide by (1 − your target margin). The calculator above runs this exact sequence.
What is the pricing formula for small businesses?
Price = (direct costs + labour + overhead share + packaging + delivery) ÷ (1 − target margin − fee rate). Fee rate and margin are both percentages of the final price.
How much profit margin should I aim for?
For handmade and small-batch products, 30–50% net margin per unit is a common target — it has to absorb returns, discounts, slow months and your own wage. Below 20%, one bad month can wipe out the profit.
Should I include my own labour in the cost?
Yes, always, at the rate you would pay someone else — or the rate from the freelance rate calculator. “My time is free” is how profitable-looking businesses pay their owners nothing.
How do Etsy fees affect my pricing?
Etsy charges listing, transaction and payment-processing fees that together typically take around 10–13% of the sale depending on your setup (plus offsite-ads fees if applicable). Because fees are a percentage of the price, they must be solved into the price — adding 12% to your costs understates them.
Cost-plus vs value-based pricing — which is right?
Cost-plus (this calculator) guarantees you do not lose money. Value-based pricing (charging what the outcome is worth to the customer) can earn far more but requires positioning and proof. Use cost-plus as the floor and value-based thinking as the ceiling.
Is my pricing data uploaded anywhere?
No. All calculations run locally in your browser.
Related tools
External references
- SBA — Plan your business (includes cost structure guidance)
- GOV.UK — Keeping business records
- IRS — Recordkeeping for small businesses
This tool provides estimates for guidance only and is not professional financial, tax, or legal advice.