A selling price has to cover what the product costs you, pay you for your time, absorb selling fees and still leave a profit. The guides here turn that rule into formulas you can drop into Excel or Google Sheets.
| Method | How it works | Good for | Watch out for |
|---|---|---|---|
| Cost-plus | Total unit cost × (1 + markup) | Simple products with stable costs | Ignores what customers are willing to pay |
| Target margin | Unit cost ÷ (1 − target margin) | Hitting a profit goal reliably | Selling fees must be counted in cost or margin |
| Market-based | Start from comparable prices, then check your margin | Crowded categories | Can hide a loss if your costs are not checked |
Example: with a unit cost of $12 and a target margin of 40%, the price is $12 ÷ 0.6 = $20. The markup on that price is 66.7%, not 40%.
Percentage selling fees are charged on the sale price, so they come straight off your margin. If percentage fees add up to 10% of the price, a 40% margin before fees becomes 30% after them. Build the fees into your formula instead of hoping the margin will absorb them.
To see what you keep after marketplace fees, read Etsy & Shopify Seller Profit, or go back to the Online Selling & Inventory hub.
Build a profit margin calculator in Excel or Google Sheets: the margin and markup formulas, how to convert one into the other, how to price for a target margin and the mistakes that cost sellers money.
A step-by-step way to price handmade products: count every material, pay yourself for your time, share out overhead, add profit, cover selling fees and then test the price against the market.