Pricing formulas for craft sellers
Five models, one item, and the arithmetic written out — including the two that quietly disagree about what "double it" means.
The five formulas are cost-plus markup, margin-based pricing, wholesale keystone, labour-inclusive cost and fee-aware marketplace pricing. Applied to the same $9.00 item they produce prices from $9.00 to $36.00, and the difference is not a matter of taste — each answers a different question, and only one of them accounts for what the platform takes.
Pricing advice for makers tends to arrive as a single rule — double your materials, triple your costs, charge what it is worth. Each of those is a formula with its assumptions left out, and the assumptions are where the money goes. This page writes all five out against the same item, a $9.00 unit cost computed rather than chosen, so the differences between them are real.
The first thing the comparison shows is that markup and margin are not synonyms. Ask for 50% as a markup and the price is $13.50 — half the cost added on, which turns out to be a 33% margin. Ask for 50% as a margin and the price is $18.00, which is a 100% markup. Same percentage, same item, $4.50 apart — and the maker who says "I take 50%" almost always means the second and charges the first.
If you have not settled your cost yet, start with how to price handmade products — every formula below takes a unit cost as its input, and a formula applied to an incomplete cost is a confident wrong answer. The craft pricing calculator runs all of this against your own batch.
Five formulas, one $9.00 item
Each model applied to the same computed unit cost, at 50% markup, 50% margin, a 2× retail multiplier and 10% of platform fees where the model uses them. The margin column is the share of the price that sits above cost — on the fee-aware row that share is the platform's rather than yours, which is why it is a floor and not a price.
Which one to reach for
Margin-based, from a labour-inclusive cost. It states profit the way a buyer, an accountant and a marketplace all state it, and it is the only model that needs no translation.
The retail price a 50% wholesale figure has to support so a stockist can double into it. Set it in this direction only — working backwards from a retail price you like is how a wholesale figure ends up under cost.
The floor rather than the price: what the item must list at to clear its own cost once fees are paid. Everything above this is margin, and anything below it is a sale you pay for.
The five formulas
price = unit cost × (1 + markup) — A quick number when you are selling direct and know your costs are complete. It is the model that gets confused with the one below it, and the confusion always costs you. The same percentage means a smaller price here than it does as a margin, because a markup is a share of the cost and a margin is a share of the price.
price = unit cost ÷ (1 − margin) — Any time you want to state profit as a share of the price, which is how a buyer, an accountant and a marketplace all state it. Nothing, arithmetically. It just needs a complete cost, and a cost that leaves out your time is not one.
retail = wholesale × multiplier — Selling to shops. It sets a retail price a stockist can double into without undercutting you at your own stall. If you set retail first and work backwards, the wholesale price that falls out is often below your cost. That is the trap it exists to prevent, and it only works in the stated direction.
unit cost = materials + (minutes ÷ 60 × rate) + overhead — Everything. This is not an alternative to the models above — it is the cost they all take as their input. Only when it is skipped, which is most of the time. An hour of unpaid work per batch is the commonest reason a profitable-looking price is not one.
price = (unit cost + fixed fee) ÷ (1 − fee%) — Anywhere a platform takes a cut. It is the only model here that solves for the price you need to LIST at rather than the price you want to receive. It flatters nothing and is the one people leave until last, by which point the listing is live and the margin is already gone.
Using them without being caught out
Only when it is skipped, which is most of the time. An hour of unpaid work per batch is the commonest reason a profitable-looking price is not one. Every other formula on this page takes the cost as given, so an incomplete one propagates straight through to the price and looks perfectly reasonable doing it.
The same 50% is $13.50 as a markup and $18.00 as a margin — $4.50 apart on one item, and multiplied by every item you sell. When a supplier, a stockist or a course quotes you a percentage, ask which one they mean before you agree to it.
Wholesale is the constrained end: it has to cover cost and margin and still leave a shop room to double it. A retail price chosen first will often not support any wholesale price at all, and you find that out in the middle of a stockist conversation.
Fee-aware pricing is the only model here with an input you do not control. When a platform moves its rates, the listing price that broke even yesterday does not today — and nothing on the listing tells you.
A net margin under 30% has no room in it for a refund, a breakage or a slow month. If a formula hands you a price under that, the answer is a bigger batch or a different item rather than a smaller margin — scaling the batch is usually the cheaper lever.
Run all five on your own item
Enter what a batch costs and what it yields, and see the cost, the wholesale floor, the retail price and what actually reaches you after fees.
Open the craft pricing calculator →Estimates, not advice. Every figure on this page is computed from published reference values and standard measures, so your own inputs, equipment and conditions will move it. Nothing here is professional advice — talk to a qualified professional before acting on it.