How To Price Your Products On Etsy (Plus A Profit Calculator)

When you start selling your handmade items, whether it’s on Etsy, another platform, or your own website, you’ll probably have trouble with the pricing part of it.

Because Etsy has so many people who sell things that aren’t really handmade, the pricing for certain items can be really variable. If you use competition research to set your prices you might not end up making any money.

So how should you go about pricing your items for sale on Etsy, or online in general?

To price handmade items for sale on Etsy or online, you need to have a good grasp of all of your business expenses and include them in the cost of each item. You also need to include the cost of your time and materials. This will ensure that all of your annual costs are covered, and that you’ll be able to make a profit at the end of the year.

When I see people talking about formulas that involve multiplying your materials cost by 2 or whatever it is, I tremble a little inside because I know it will make people go broke.

And beyond the actual pricing formula, there are other things to consider when you decide on your pricing. Read on to see some of the things that you might not have considered.

Table of Contents


How to decide on your prices for Etsy.

When you’re pricing items for Etsy, you need to take a few things into account:

What will the market bear?

If the price that you need to charge for the things that you make is more than the average price on Etsy, you’ll need to do different things in your listings to validate that price.

If you’re charging way more than other people on Etsy, it will be harder to find a solid customer base.

It’s possible to charge on the high end of what’s available, but if you do that you need to make sure that your branding and packaging reflect the price.

Charging a high price and then sending the products in a recycled diaper box will not inspire trust in your customers, no matter how much they say they like recycled packaging.

Image saying how to price your products on Etsy, plus a profit calculator

Are you making a profit?

If you set a price based on a formula (it usually doesn’t work) it’s possible that you won’t be making the profit that you want.

If it doesn’t make sense as far as profits go to sell a specific product, then stop selling it.

I’ve removed a lot of items from my shop because the profit wasn’t worth the time or the effort, or because Etsy’s off site ads fees ate up too much of the profit.

Have you included all possible discounts and fees into your prices?

When you sell on any platform, the fees that the platform charges have to be added in as an expense. You also have to think about any potential discounts or coupons that you offer.

If you don’t take those things into account, you might not make as much as you think, and you might actually end up losing money on some sales.

If you want to make sure to get everything included in your pricing, you should get my Pricing Guide here: Pricing Guide for Etsy Businesses.Opens in a new tab. It goes into full detail about how to figure out how much to include in the price of each item so that you’re not caught off-guard.

This profit calculator is part of the Pricing Guide, but you need to make sure that you’re filling it out completely. Without the full guide, you might be leaving things out!

To populate the income section make sure to choose a button for the discount even if there isn’t one. You also need to remember that off-site ads could come into play, so make sure to add that in if you participate in those.


Once you get past the deciding on prices part, you then have to think about how you’ll structure your price points.

This is one of my pet peeves, so let’s get right into it.


Should you use .99 pricing on Etsy?

When you use prices that end in .99, you immediately create an impression with people that the item is manufactured, not handmade. Prices that end in 99 cents also make people think that it’s a commodity item, so you need to be careful with this tactic because it can affect what people feel about your products.

There’s a lot of discussion about “charm” pricing, which is where you use a lower number in the first position of the price (the dollar amount) then make the cents part 99 cents.

The theory is that people will think that the item is cheaper than it is, but I’ve never seen a good study on this that’s based on ecommerce shopping. (If you have one please send me the link, I’m genuinely interested in seeing it.)

There are a few articles that circulate online that say that this works, but if you really look into them they’re not based on ecommerce sales, and they’re not based on the 99 cent ending. It’s usually about prices that end in a 9 in the dollar position, not in 99 cents.

Whenever this topic comes up in forums, someone always points out Apple and says “Apple does it,” but Apple uses whole dollar amounts that end in 9, then 00 in the cents position.

The only thing they price at .99 is music downloads, so that’s not a physical product.

On a psychological level, when people see 99 cents they think “cheap,” and not always in a good way.

If you’re a handmade artist who wants people to take them and their work seriously, I would highly advise you to price your products in whole-dollar amounts. This avoids the feeling of “cheapness” that comes with the 99 cents ending.

If you don’t believe me about this, go look at a high-end jewelry store and see how many 99 cent price points they have. More expensive shops usually reserve the 99 cent endings for things that are on sale or clearance, but most of their prices will end in 00 cents.

Another thing to consider is that if you’re dealing with a currency conversion, the prices are going to end up in random amounts anyway, so it might not even be something that you can control!

If you’re a non-US shop selling to US customers, don’t worry about it too much because you can’t change it unless you price your items in US dollars. And that’s going to cost an additional currency conversion fee, which isn’t worth it.



Is there a way to price things that everyone in your category uses?

Digital sellers and people who make t-shirts will recognize that there are definite niche-specific conventions when it comes to pricing certain items on Etsy.

If you do have products in a niche where everyone prices things really low, or where everyone uses 99 cent endings, you need to decide if you want to go along with the pack or try to break free.

Is there a reason for the way those people are pricing things? Or are they just doing it because everyone else is doing it?

Would pricing your products differently also set your items apart in a good way? For example, maybe you print t-shirts and everyone sells similar items for $19.99.

You might want to price yours higher and use an even dollar amount, then market your shirts as a higher quality or a more unique design.

You can do that if your products really are a higher quality or a more unique design, which also plays into the fact that competing on price is a loser’s game.



Don’t compete on price on Etsy.

There is no good reason to compete on price alone when you sell on Etsy. The fact is, when people start undercutting each other, all it takes is someone to come along and mark their items at 1 cent less than yours in order to “win.”

In this case, the winner is the loser.

Compete on quality and originality, emphasize that in your marketing, and you’ll have a much better chance of making a profit at the end of the year.

People also tend to think of a higher price as being an indicator of higher quality, so don’t leave the human behavior part of it out of your calculations!

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Consider where else you sell your products.

If you sell on any platforms other than Etsy, or if you have your own website, you’ll need to decide whether you want to charge the same or have different prices in each place. There are reasons why you would want to have prices a little lower on a website than on Etsy, mainly so that people shop on your website for a better price.

On the other hand, you might want to price things the same way everywhere that you sell, then give them different incentives to shop in different places.

I price my products on Etsy the same as I do on my websiteOpens in a new tab., but I offer free US shipping with a sale over $10 on my website.

I’ve heard of people who only offer coupons on their websites, and never on Etsy. There are ways to move people from Etsy to your website where you don’t have to pay Etsy’s fees, and pricing can be one of them.


There are a lot of things to consider when you set your prices, and figuring out your profit margins is only the first step. Think about how you want people to think of your products before setting your prices, because there’s a lot of consumer perception that goes into making purchasing decisions!

Kara

Kara Buntin has run a home-based business since 1999, and has a background in art, theater design, and cake decorating. She's a top Etsy seller with over 46,000 sales on Etsy and her own website, and helps other home-based business owners with their business goals and SEO.

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