You've spent your time, energy and creativity making a product for Etsy. You've arrived at the point where you're ready to sell, and it hits you: Where should I price this? Follow the website's pricing guidelines and earn enough to make an income. Even for the novice businessperson, there are easy ways to calculate how much green you should get for your goods.
To set your price on your good, you'll need to follow some guidelines. Etsy's guide provides parameters on how to price what you are selling. Its first rule is, "Listing prices must be reasonable" – basically, how much you'd expect to pay for the product in a shop. It also states shipping costs should be reasonable and sellers shouldn't price items inaccurately so as not to sell them (let's say you want to show off a great necklace you made, but you'd rather keep it for yourself).
Determine materials and labor. Determine how much you paid for the materials used to make the good. For labor, determine how much you paid your employees or how much time you put into the product; give yourself a good hourly rate. Add your labor and materials costs together. Multiply that number by 2 to get your wholesale price. Multiply by 3.5 or 4 to get your retail price -- you can adjust that based on the market.
As your business grows, start tracking expenses. Selling on Etsy costs money -- you're going to pay $0.20 for each item you list on Etsy, and it takes 3.5 percent of the sale. But there are other business expenses -- transportation, shipping materials, website costs, office supplies and workspace rental, for example. Build these expenses into your item price by dividing your monthly expenses by the number of items you sell each month and adding that number to your prices. For example, if your monthly expenses were $124 and you sell 31 items each month, divide 124 by 31 to get 4. So, add $4 to your price.
Assess the market and use your judgment. If your goods aren't moving quickly enough, try to determine if your prices are too high or low for the marketplace. If you can't keep up with demand on one item, consider raising its price. While your products are unique, it doesn't hurt to check out more established Etsy sellers. Finally, a piece of advice frequently passed around between Etsy sellers: Don't necessarily price items based on what you would pay for them. Price them where customers in a niche store might pay for them.
