Pricing handmade work
Materials, time and overhead, worked end to end with a real example — and why underpricing costs more than it earns.
The hardest question in handmade work is not how to make the piece. It is what the piece sells for. Most of the advice on offer comes in two flavours: match what the market charges, or double the cost of materials. Both produce a number that looks reasonable and loses money, because both leave the two largest line items outside the calculation — the hours the work takes, and the costs that run whether or not anything sells this month. What follows is the whole calculation, worked through with numbers. The numbers in the example are illustrative only: the real ones differ by craft and by month. It is the order of the line items that matters, not their size.
The four numbers a price is built from
A sound price rests on four figures, in this order: 1. Materials — everything that physically goes into the piece, down to the thread, the glue, the box and the card. 2. Time — the real hours the work takes, multiplied by an hourly rate. 3. Overhead — the piece's share of the costs that run outside the piece itself. 4. Margin — what lets the work grow rather than merely continue. Numbers 2 and 3 are the ones that usually fall out. Without them the figure that comes out is not a selling price at all: it is materials cost recovery, which is a different thing entirely.
Materials: the box, the card and the waste
Materials are counted per piece, not per month, and they include everything that leaves the workshop with the piece. An illustrative example, for a necklace: • Beads and chain: 55 EGP • Clasp and rings: 10 EGP • Box, card and wrapping: 20 EGP • Waste at 10% (a bead that drops, thread that snaps, a cut redone): 8 EGP Materials total: 93 EGP. The waste line is the one most often left out, and it is the difference between a calculation on paper and one that survives contact with a workbench. Every craft has spoilage, and spoilage is paid for out of profit whenever it is not priced in. The box and the card are a full materials line, not a detail. Packaging that arrives intact and opens easily belongs in the price exactly as the beads do.
Time: an hourly rate is not a gift
Time is the first line to be quietly dropped when the price starts to look high, and dropping it is the most expensive decision in the whole calculation. The method: total hours the piece takes — making, packing, answering messages, photographing — multiplied by an hourly rate. Continuing the example: the piece takes two and a half hours, at an illustrative rate of 40 EGP an hour. 2.5 × 40 = 100 EGP. That rate is not arbitrary, and one question gets you to it: if those same two and a half hours went into any other work, what would they have earned? If the answer is higher than the number in the calculation, the handmade work is being funded by free labour — which runs for a month or two and then stops. One practical note: time spent answering messages is a real line and belongs in the total. The hour a day that goes into the same repeated questions is part of the cost of every piece that sells.
Overhead: the per-piece share
Some costs run even in a month with no sales: internet, electricity and gas for the kiln or the iron, tools that wear out, advertising if there is any, and the monthly photography session. The practical method: total monthly costs ÷ the number of pieces expected to sell that month. Continuing the example: 600 EGP a month in costs, and 20 pieces expected. 600 ÷ 20 = 30 EGP per piece. There is a trap here. As the count falls, the share rises. A month with only 10 pieces sold carries 60 EGP per piece, not 30. Pricing against a volume that has not happened yet is itself the trap — the safer basis is an average of the months already behind you, not the best case of the month ahead.
The full calculation, and the price
Adding the illustrative lines together: Materials 93 + time 100 + overhead 30 = 223 EGP, the cost of the piece. Margin goes on top of cost, not inside it. At 40%: 223 × 1.4 = 312 EGP, rounded to 315 EGP. The gap between that figure and "double the materials" (186 EGP) is precisely the hourly rate plus the overhead share. So the gap is not the price being inflated — it is the line item that was missing all along. Shipping sits outside this calculation entirely: a flat 100 EGP to every governorate, paid by the buyer on top of the price of the piece. The number quoted in a chat is the price of the piece, with shipping stated separately beside it.
The traps of underpricing
A low price looks like it sells more. In handmade work it usually does the opposite: • The workload rises and the income does not. Twice the orders at half the margin is the same money for twice the exhaustion — and the exhaustion is what ends the business a few months later. • Price is read as quality. A hand-made piece at a factory price invites the question of how it could possibly be made that cheaply. • Raising it later is harder. Someone who paid 180 and then sees the same piece at 315 feels something has gone wrong, even when the new number is the correct one. • Discounts stop meaning anything. A properly priced piece can carry an occasional offer; a piece priced at the edge can only eat into its own profit. The alternative is not simply charging more. It is that the number rests on a calculation you could say out loud if somebody asked — which, on its own, makes answering "why is it so expensive?" far easier.
Common questions
How is the hourly rate decided?
There is no single figure that works for everyone. The practical question: if that same hour went into any other work, what would it have earned? That is the sensible floor, and anything below it means the time is being donated.
Why add a margin when the time is already paid for?
The hourly rate pays for the labour. The margin is the return of the business itself — it covers spoilage, returns, new materials, and growth. Without it the work covers its own costs and never expands.
The price came out higher than the market. Now what?
A higher price needs a stated reason beside it: different materials, entirely hand-made, made to order, repairs after purchase. A price difference with no explained difference reads as overcharging; with one, it reads as value.
The hours lost to messages are part of that cost
Crafida takes on the part that eats the hours counted above: messages get answered on their own at any hour, the order gets closed, shipping and collection are handled, and the money arrives within 48 hours. 5% of the order, no monthly subscription, and your first 3 months from your first sale carry no commission at all.