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How to price handmade items so marketplace fees don't eat your profit

How to price handmade items so marketplace fees don't eat your profit

11. November 2026

Many makers add a markup to their cost. The trouble is that marketplace fees and your profit are shares of the selling price, not of the cost. A markup on cost leaves you with less than you planned.

The formula

Price = cost ÷ (1 − fees % − profit %)

Cost means everything one item takes: materials, packaging and your making time at a fair hourly rate.

A worked example (made-up numbers)

Cost 20. Marketplace and payment fees 10%. You want 20% profit.

  • Adding 30% to the cost: 20 × 1.3 = 26.00. Fees take 2.60, so you keep 3.40. That is only 13% of the price.
  • Dividing: 20 ÷ (1 − 0.10 − 0.20) = 20 ÷ 0.70 = 28.57. Fees take 2.86, and you keep 5.71. That is the 20% you wanted.
  • Check a sale before you run it

    A 20% discount on 28.57 makes the price 22.86. Fees fall to 2.29, and your profit falls to 0.57. To earn the same money as at full price, that sale needs about ten times as many orders.

    A small free gift, a bundle or free shipping often costs you less than a big discount. Work it out first.

    Free tools

  • [How to price a handmade item](https://khairzada-craft-tools.pages.dev/pricing-guide.html): a full worked example
  • [Hourly rate calculator](https://khairzada-craft-tools.pages.dev/hourly-rate.html)
  • [Etsy fee calculator](https://khairzada-craft-tools.pages.dev/etsy-fee-calculator.html)
  • [Crochet pricing calculator](https://khairzada-craft-tools.pages.dev/crochet-pricing-calculator.html)
  • [Discount impact planner](https://khairzada-craft-tools.pages.dev/discount.html)
  • The full workbook

    The [Craft Pricing Workbook](https://www.getly.store/product/craft-pricing-workbook-price-handmade-products-from-real-costs) does this for every product you make: material cost per unit, a recipe for each product, your hourly rate, the suggested price, and what a 10% or 20% discount would do to your profit.