How do I work out what a handmade item costs to make?
Last updated October 1, 2026
Your cost to make one item is the cost of the materials it uses plus the cost of your time. For each material, multiply the amount one item uses by that material's cost per unit, and add those together. Then add your labor: the minutes the item takes, divided by 60, times your hourly rate.
What is the formula?
Cost to make = materials + labor
Materials = the sum of (amount used x cost per unit) for every material in the item.
Labor = (minutes to make one item / 60) x your hourly rate.
Knowing this number is the starting point for any price. Whatever you charge, the difference between your price and your cost to make is what pays you beyond your hourly rate.
How do I work it out step by step?
- List every material that goes into one item, including small things like wicks, labels and packaging.
- Find each material's cost per unit: what you paid divided by how much you bought.
- Multiply each cost per unit by the amount one item uses.
- Add those amounts together to get your materials cost.
- Time how long one item takes, in minutes, and pick an hourly rate for your work.
- Labor cost = minutes / 60 x hourly rate. Add it to your materials cost.
What does that look like for a candle?
| Material | Amount used | Cost per unit | Cost |
|---|---|---|---|
| Soy wax | 8 oz | $0.25 per oz | $2.00 |
| Glass jar | 1 | $1.50 each | $1.50 |
| Wick | 1 | $0.10 each | $0.10 |
| Fragrance oil | 0.8 oz | $1.25 per oz | $1.00 |
| Materials | $4.60 | ||
| Labor | 15 minutes | $20 per hour | $5.00 |
| Cost to make | $9.60 |
This is an illustrative example, not data from a real shop.
What should I do with the cost to make?
Compare it with the price you charge. If you sell this candle for $24, your profit before any marketplace fees is $24 minus $9.60, which is $14.40. If you sell on a marketplace, take its fees out of the price first. The Etsy fees guide shows how.
Doing this in MakerKit
- Add each material once with what you bought and what you paid. MakerKit works out the cost per unit.
- Build a recipe for each product with the amount of each material it uses. MakerKit adds up the materials cost as you go.
- Set your hourly rate in Settings and the labor minutes on the recipe. MakerKit adds the labor cost to give your cost to make.
- The free calculator does the same sum for a single product without an account.