Add up materials, packaging and a wage for your time, then set a price that leaves the profit margin you want after selling fees. A candle costing $5 in materials and 15 minutes of work at $20 an hour has a $10 unit cost; for a 40% margin after a 6.5% + $0.30 fee, the price is about $19.25.
Step 1: Your real cost per item
| Cost | Per candle |
|---|---|
| Wax, wick, fragrance and jar | $4.20 |
| Packaging and label | $0.80 |
| Your time: 15 minutes at $20 an hour | $5.00 |
| Unit cost | $10.00 |
Leaving out your time is the most common pricing mistake. If you don’t pay yourself, you’re working for free and can’t grow later.
Step 2: Price for the margin you want
Selling platforms usually take a percentage of each sale plus a fixed amount. Using an example fee of 6.5% + $0.30: price = (unit cost + fixed fee) ÷ (1 − margin − fee percentage).
| Target margin | Price |
|---|---|
| 30% | $16.22 |
| 40% | $19.25 |
| 50% | $23.68 |
At $18, fees are about $1.47 and your profit is $6.53 per candle, a 36% margin, on top of the $5 you paid yourself. Our guide to margin vs. markup explains the difference between the two.
The wholesale trap
Shops usually buy at about half the retail price so they can make their own margin. At $9 wholesale, a candle that costs you $10 loses $1 each. If you want to sell wholesale, your retail price must be high enough that half of it still covers your cost and a profit.
Check it against the market
- Compare similar handmade products, not mass-produced ones.
- If your price is higher, explain why: materials, size, burn time, design.
- If it’s much lower, you may be underpricing; raising it can increase profit even with fewer sales.
- Know your break-even: how many you must sell each month to cover fixed costs. See break-even point.
What discounts do to your profit
Starting from the $19.25 price with a $10 unit cost and the same example fees:
| Discount | Price | Profit per candle | Margin |
|---|---|---|---|
| None | $19.25 | $7.70 | 40.0% |
| 10% | $17.32 | $5.90 | 34.0% |
| 20% | $15.40 | $4.10 | 26.6% |
| 25% | $14.44 | $3.20 | 22.2% |
A 20% discount cuts profit per candle by almost half, so you’d need to sell nearly twice as many to earn the same. Bundles often work better: three candles for $50 still leaves about $16.45 of profit after fees.
More questions
How do I calculate the price of a handmade product?
Add materials, packaging and your time to get the unit cost, then divide by (1 − target margin − fee percentage), after adding any fixed fee per sale.
Should I include my time in the price?
Yes. Pick an hourly wage and include it in the unit cost; otherwise your profit is really unpaid work.
What profit margin should a handmade business aim for?
It varies, but many makers aim for a margin that still works if they sell wholesale at about half the retail price.
How do I price a product based on cost?
Use the formula price = cost ÷ (1 − margin). For a $10 cost and a 40% margin with no fees, that’s about $16.67.
The bottom line
Count your time as a real cost, include selling fees and price for the margin you need. If you plan to sell to shops, make sure half your retail price still covers your costs.
Sources
This article is for educational purposes only and is not business or financial advice. Costs and fees are illustrative examples.