Earning Money
15 minutes
Global
How to price your handmade goods or services fairly
Why this matters
Most people in small-scale informal work underprice themselves, which means they work long hours for less than the cost of their materials. Learning to price correctly is the foundation of any sustainable small business.
What you need
Pen and paper
Knowledge of your material costs
Honest estimate of the time each product or service takes
These are everyday items. If you don’t have one, look for the closest alternative — the steps will tell you what to use instead.
How to do it
Follow these steps in order. Take your time. You’ve got this.
Calculate your material costs exactly. Write down every item you use to make your product and what it costs, including packaging and transport to market.
Calculate your time. Decide what your time is worth per hour. Multiply by the hours it takes to make one unit.
Add material cost plus labour cost together. This is your break-even price — the minimum you must charge to not lose money.
Add your profit margin. A minimum of 20% on top of your break-even price is a healthy starting point. This allows your business to grow, replace tools, and handle slow periods.
Research what similar products sell for in your local market. If your price is higher, either find ways to reduce material costs or improve the quality and presentation of your product to justify the difference.
Your one thing today
Pick one product or service you offer and run through these five steps with real numbers right now.
Don’t wait for the perfect moment. Do this one thing now, even if it’s small.
Come back tomorrow
A new skill will be waiting for you tomorrow. Or if you’d like to keep learning today, explore the full library.