How to Price Handmade Work: A 5-Step Formula for Makers Who Undercharge

Here is the short answer. To price handmade work fairly, add up five things and stop guessing: materials plus a waste allowance, your real hours at a real hourly rate, overhead at roughly 15% of that subtotal, a profit line of about 10%, and then whatever the selling platform takes off the top. For most makers that lands somewhere between two and four times the cost of the raw material, and it is almost always higher than the number you were about to say out loud.

September is when this stops being theoretical. Holiday market applications are open, the "can you make me one for Christmas?" texts have started, and somewhere a very good maker is about to quote $60 for a walnut cutting board that cost them $61 in lumber. Let's fix that.

In this article

• The formula, in one table
• Step 1: Materials, plus waste
• Step 2: Your actual hours, at an actual rate
• Step 3: Overhead, the costs you forget
• Step 4: The cut you never see
• Step 5: Profit is not your wage
• A worked example: the $60 cutting board
• What do I say when a friend asks for mates' rates?
• FAQ

What is the formula for pricing handmade work?

Every credible pricing method in the craft world is a variation on the same five lines. Rockler's project pricing guide uses this structure, and it works just as well for a leather bag, a forged hook or a restored cast iron plane as it does for furniture.

Most people who undercharge are not bad at arithmetic. They just quietly delete three of these five lines.

Step 1: Count materials, then add for waste

Materials are the easy part, which is why makers spend most of their thinking time here and almost none on the rest. Add up stock, hardware, adhesive, abrasives and finish. Then add a waste allowance, because you did not use every inch of that board and you know it.

Two workable methods. The quick one: estimate your board footage or square footage and add 20% for waste and defects. The accurate one: write a real cut list before you buy, which lets you order close to exact and keeps the offcut pile from becoming a second hobby.

Marc Spagnuolo of The Wood Whisperer adds a flat 10% on top of materials for the things nobody itemises: the extra board you bought because one had a check in it, the drive to the yard, the tube of glue you opened for one joint.

Count the consumables too. Sandpaper is a material. So is the finish you brush on, the blade you dulled, and the shop towel graveyard by the bench. Individually they feel too small to bill. Across a year they are not small at all.

Step 2: Pay yourself an hourly rate you would accept from someone else

This is where the number gets uncomfortable, so here is a floor to argue from. The US Bureau of Labor Statistics puts the median pay for woodworkers at $21.79 per hour as of May 2025. That is for employees, with someone else buying the machines, paying the light bill and carrying the insurance. You are doing all of that yourself, so your rate has to sit meaningfully above it.

Working makers generally land between $30 and $50 an hour. Spagnuolo started at $50, found it did not survive contact with reality, and settled around $35 to $40. That is a sane place for most people to begin.

Now the harder half: track the hours honestly. Not the hours you remember, the hours that actually happened. Milling. Two glue-ups with clamp time in between. Flattening. Sanding through the grits. Three coats of finish, spread across three evenings because that is how finish works.

You will underestimate. Everyone underestimates. The fix is to log real times for five or six projects and then trust the log instead of your optimism.

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Step 3: Add overhead, which is everything you already paid for

Overhead is the cost of having a shop at all, whether or not you build anything this month. Power. Heat. Blade sharpening and replacement. Dust collection filters. Machine maintenance. Insurance. The slow depreciation of tools that will eventually need replacing.

The industry shorthand is roughly 15% of your materials-plus-labour subtotal, and that is close enough to start with. If your shop is heated all winter or you are paying rent on space, it is higher.

Rust, incidentally, is an overhead cost too. A seized plane or a pitted table saw top is money leaving the building quietly. If your shop swings with the seasons, our guide to preventing rust on tools in a garage shop covers the fixes that actually hold.

Step 4: Subtract the platform's cut before you set the price, not after

This is the step that turns a fair price into a loss, and it happens after the build is done.

If you sell on Etsy, the fees stack: $0.20 per listing, a 6.5% transaction fee calculated on the total including shipping, and payment processing of about 3% plus $0.25 for US sellers. That is roughly 10% before advertising. Offsite Ads adds 12% to 15% of the order when a sale comes through one, and shops over $10,000 in trailing annual sales cannot opt out. A sale that triggers Offsite Ads can hand back close to a quarter of the ticket.

Craft fairs charge differently but no less. A standard 10x10 booth commonly runs $150 to $500 for a one-day or weekend show in 2026, with large or well-known festivals running $200 to $800 and some past $1,000. Juried shows often add a non-refundable application fee on top. Then travel, a table and canopy, and card processing at 2.6% to 2.9%.

The move is simple. Work out what you need to clear, then divide by one minus the fee rate. Need $277 in your pocket on a platform taking 10%? List it at $308, not $277.

For a market, divide the booth fee across the pieces you realistically expect to sell, not the pieces you are bringing. A $250 booth across 20 sales is $12.50 on every price tag.

Step 5: Profit is not the same thing as your wage

Your hourly rate pays you for the work. Profit belongs to the business, and it is what replaces the bandsaw when the bandsaw dies. Roughly 10% of the subtotal is the conventional figure.

Skip it and you have built a job that cannot buy its own tools. Every replacement then comes out of household money, which is the exact moment a hobby starts causing arguments.

A worked example: why that cutting board is not $60

End-grain walnut board, 12 by 18 inches. Numbers rounded.

Now you can see the whole problem. The $60 end-grain board at the church hall market is not a bargain, it is someone paying $200 for the privilege of standing behind a folding table in December. They will do two seasons of that and then quietly stop, and everyone will say the market for handmade goods has dried up.

It has not. The pricing was wrong.

If $308 is more than your buyers will pay, you have three honest options: build a smaller or simpler version, get faster at the work, or accept that this particular piece is a gift and not a product. All three are fine. What is not fine is pretending the difference does not exist.

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What do I say when a friend asks for mates' rates?

Give them the real number first, then decide what to do with it. "It works out around $280 in materials and time. For you, $150, and I'll take my time with it." Now the discount is a gift you chose to give, with a value attached, instead of a resentment you carry for six weeks.

The version that goes badly is the one where you say "ah, just cover the wood" and then spend eleven evenings on it. That is how people end up hating a hobby they used to look forward to.

And if it is a gift, price it anyway in your head. Knowing you just handed someone $300 of work is not greedy. It is the difference between generosity and an accident.

Do I need to do any of this if it is only a hobby?

Not really. If you are building for yourself and for people you love, the correct price is whatever you feel like, and the correct answer to "how long did that take?" is "a while."

But run the numbers once. Once. Because the moment somebody asks you to make a second one, you want to be quoting from a figure rather than from a feeling. And feelings, at 9pm on a Sunday with a deadline coming, are historically bad at pricing.

Frequently asked questions

What is a good hourly rate for handmade work?

Most working makers charge $30 to $50 per hour. Use the lower end while you are still slow at a given process and the upper end for skilled operations like hand-cut joinery, TIG welding or hand stitching. For reference, the BLS median for employed woodworkers was $21.79 per hour in May 2025, and that is with someone else paying for the shop.

Should I charge for time I spent fixing my own mistakes?

No. Charge for the time the job should take when it goes right, and eat the recovery. But do log the mistake time separately, because it tells you which operations you are still learning and where a jig would pay for itself.

How do I price a commission before I have built one?

Estimate the hours by breaking the job into stages, milling, joinery, assembly, finishing, hardware, then add 25% because you will underestimate. Quote a range rather than a single figure, and take a deposit that covers materials in full before you buy anything.

Why is my handmade piece more expensive than the store version?

Because the store version was made in a batch of five thousand, from cheaper stock, by machines that never take a coffee break. You are not competing on price. You are selling one object, made properly, that will still be here in forty years. Say that out loud to customers, it is the whole pitch.

Is it worth doing craft fairs at those booth fees?

Sometimes. Work out your break-even before you apply: booth fee plus travel plus your two days of time, divided by your average margin per piece. If you need to sell eleven cutting boards to break even and you have never sold more than six, the answer for that show is no.