3 Factors To Pricing Your Handmade Products During Inflation

How can you make more money during inflation? It sounds like an easy question, but it is not. Pricing your handmade products to make a profit is the ultimate goal but inflation with raw materials and shipping can hinder your profits. Knowing your cost to make is the key to maximizing your pricing during inflation. We will discuss three key factors that will help prepare new sellers or those who have been around for awhile but don’t know how much they need to charge in order to stay afloat during inflation.

Production Cost

The first step is to determine how much it costs you to make your product. How many hours do you put into each item? If it takes you an hour or more, then count that as the hourly wage (or however long it takes). It’s best not to guess at how long certain tasks take because 99% of us underestimate how much time an activity actually took us. Let’s assume that I believe it will take me two hours to make ten vinyl T-shirts, but in reality I spend three and a half to four hours on this project; now my cost per shirt has risen by 20%. This means that for every one hundred shirts produced, an additional twenty dollars were spent. You must compensate yourself for your time and labor expenses.


Material Cost

During inflation, knowing your material cost is critical. You can’t just estimate how much material will be required for a particular product or project; it must have an associated price. If I buy one yard of vinyl material and the design is only 12 in. x 12 in., what is the cost of the design? Would you charge your client for the whole yard? Knowing the real cost of a vinyl design is critical for accurately calculating your manufacturing expenses.


So how much do you actually charge for your handmade product? This is the question we need to answer. It’s how much can you afford and still turn a profit? Your markup percentage can only be determined by you and how much you actually need to turn a profit. There is no magic percentage that works for everyone; it’s how much you need to make in order to keep your business running. Inflation increases the cost of your products and services, therefore your markup percentage should change to reflect material and/or shipping inflation. You may keep your markup percentage the same and yet your profits will decline.

Our Take

During inflation, we recommend tracking three aspects: production cost, material cost, and markup. Knowing the actual production time will allow you to change and optimize production times, resulting in lower manufacturing periods and increased earnings. Knowing your material cost will allow you to accurately price the materials used in your product. During the period of inflation, your markup should be changed to meet your company’s demands. During inflation, you may need to reduce production time and raw material costs (buy bulk) in order to increase profits. We’ve got you covered! Our pricing calculators will help price your handmade products more professionally.