TUTORIAL: Introduction to Pricing
Not sure how to price your handmade products to actually make money? Craftybase calculates a suggested sale price for each product using the material costs from your recipe and the markup percentages you set — so you always have a data-driven starting point, not a guess.
In this article:
What is pricing guidance?
As you track your material inventory, Craftybase monitors your total current material costs to produce each product. The pricing guidance feature then calculates a suggested sale price by applying the markup percentages you have configured across each pricing tier.
Your pricing guidance appears under the "Pricing" heading on both your product and variation pages. In the example above, this is an Etsy pricing tier with no price point currently set (showing as $0.00). The guidance section suggests a price of $29.22, calculated directly from the current material cost of this product's recipe.
If you have not yet created a recipe for your product, work through the Introduction to Recipes tutorial first, then come back to this step.
The material cost is multiplied by the markup configured for the tier — in this example, 150%. This particular tier also has a commission fee configured, which is factored into the margin calculation. As this is an Etsy pricing tier, listing, transaction, and payment processing fees are automatically included too.
A markup of 150% does not equal a profit margin of 150%. Markup is the amount you multiply your base cost price by to arrive at your selling price. A 0% markup is essentially the cost price; 150% is 1.5 times the cost price. For more on the difference, see Markup vs. Margin: A Simple Breakdown.
Pricing suggestions are recalculated automatically whenever your recipe costs change. If the cost of a material increases, your suggested prices update to reflect that — so you can continuously review your pricing to protect your margins.
Good to know: Pricing guidance is designed to ensure you factor your production costs into your prices. Treat the suggestions as a starting point for your pricing strategy, not a final answer — your market, competitors, and perceived value all play a role too.
Configuring overhead
Overheads can be factored into your pricing guidance via the Pricing section in your Account Settings. To get there, click the settings icon (the sliders icon) in the top right-hand corner of any page, then select Account Settings from the dropdown.
Your overhead amount can be set as a percentage (%) or a flat rate ($):
- Percentage — calculated from each product's total material and labour cost.
- Flat rate — added as a fixed amount to each product's total material and labour cost.
For guidance on working out an accurate overhead figure for your business, see our blog post: How to calculate overheads into your product pricing.
Configuring your pricing tiers
Connecting an integration (such as Etsy or Shopify) automatically creates a preconfigured pricing tier for that channel. To add additional tiers, click the settings icon in the top right-hand corner of any page and select Pricing Tiers from the dropdown.
Tip: You can also click the tier name directly in your pricing guidance display to jump straight to the Pricing Tiers page.
The pricing tier form includes the following fields:
- Name — the label for this tier. Common examples are "Retail" and "Wholesale". If the tier is for a specific consignment location, you may want to use the consignee's name.
- Colour Key — the colour used to identify this tier in your pricing guidance list. Choosing a distinct colour makes it easy to scan at a glance.
- Markup Percentage — the amount your base cost (including any overhead) is multiplied by to produce your recommended price. A 0% markup equals the cost price; 150% equals 1.5 times the cost price.
- Listing Fee — any charges involved in advertising or listing your product for sale. Can be set as a percentage or a flat rate. (Etsy tiers have this pre-set automatically.)
- Commission Fee — any charges applied when the product sells. Can be set as a percentage or a flat rate. (Etsy tiers have this pre-set automatically.)
Click Save when you are done. Your new tier will appear immediately in the pricing guidance section of your products and variations.
Need more help?
These articles may help:
- About pricing guidance
- Accounting for overhead costs
- TUTORIAL: Introduction to Recipes (Bill of Materials)
Looking for help working out your pricing strategy? Try the free Craft Calculator to figure out how to price your products for a healthy margin.
If you have any questions, contact Craftybase Support — we are happy to help.