When to Raise Your Handmade Prices — and How to Know for Sure
Most advice says raise prices when you feel undervalued. That's backwards. Here's how to use actual cost data to know when — and by how much — to raise your handmade prices.
Raising your prices feels terrifying. That’s not a character flaw — it’s almost universal among makers. The fear that customers will disappear, that you’ll come across as greedy, that your work isn’t worth more — it’s all completely normal.
But here’s the thing most pricing advice gets wrong. It tells you to raise prices when you feel undervalued. That’s a confidence game, and it misses the actual question. The real question is: do your numbers tell you that you have to?
Right now, in 2026, a lot of makers are finding that the answer is yes. Material costs have climbed sharply over the past year due to tariffs on imported goods. If you’re buying craft supplies, pigments, packaging, or raw materials from overseas — and most makers are — your cost per unit has probably gone up. Maybe significantly.
The trouble is, if you don’t know what your products actually cost to make, you won’t notice. You’ll just quietly lose margin until the business stops making sense.
This guide is about using real cost data to make the decision, not gut feeling.
What are the signs it’s time to raise your handmade prices?
The clearest sign it’s time to raise your prices is that your actual cost to produce each item has risen, but your selling price hasn’t kept up.
That might sound obvious. But you’d be surprised how many makers are running on prices they set two or three years ago — prices based on material costs that no longer exist.
Here are the data signals worth watching:
Your material costs have gone up. This is the big one right now. If you source materials with any international component — and that includes things you might not expect, like certain pigments, fragrance oils, packaging supplies, or hardware — there’s a good chance the cost has crept up in 2025–2026. If you’re not tracking your material costs per unit in real time, these increases are invisible until they hit your bank account.
Your COGS per unit has drifted upward. Cost of goods sold (COGS) is what it actually costs you to make one unit of your product — materials, consumables, packaging, and any direct labour. If that number has gone up but your price hasn’t, you’re earning less on every sale. You may not even realise it. (See our guide on calculating your profit margins for more on this.)
Your profit margin has shrunk below a sustainable threshold. Most makers should aim for at least a 30–40% gross margin at minimum. If you’re below that — especially if you’re wholesale or consignment — small increases in materials can tip you into loss territory fast.
You’re turning over more orders but feeling like you’re making less. This is one of the more demoralising versions of the problem. Busy, but not profitable. If that describes your last few months, your pricing is almost certainly not keeping pace with your costs.
You haven’t reviewed your prices in more than 12 months. Costs change. Supplier pricing changes. Your time gets more scarce as the business grows. An annual pricing review isn’t paranoia — it’s just basic maintenance.
How to calculate whether you actually need to raise prices
This is where most pricing guides let you down. They talk about “charging what you’re worth” without giving you a method.
Here’s the method.
Step 1: Know your actual COGS per unit
For each product, add up:
- Materials — the cost of every ingredient or component that goes into one unit
- Consumables — things like packaging, labels, tissue paper, wax paper
- Direct labour — your time, valued at an hourly rate (even if you’re not paying yourself yet — you should account for it)
- A slice of overhead — things like insurance, studio rent, equipment depreciation, spread across your units
That total is your COGS per unit. It’s the floor below which you cannot sell without losing money on every transaction.
If you’re not sure what this number is for each of your products, you’re flying blind. Craftybase calculates this automatically from your recipes and material costs — so if your material costs change, your COGS updates with them.
Step 2: Compare COGS to your current price
Take your COGS per unit and divide it by your current selling price. Subtract from 1. That’s your gross margin.
For example: if it costs you $8.50 to make a candle and you’re selling it for $22, your gross margin is roughly 61%. That’s healthy.
But if your wax costs have gone up and your COGS is now $11.00 — and you still sell at $22 — your margin has dropped to 50%. Still okay. But if it keeps creeping and reaches $14, you’re at 36%. At $17, you’re at 22%. And suddenly you’re doing the maths and realising you’ve priced yourself into poverty.
Step 3: Calculate your minimum viable price
Your minimum viable price is the price at which you still hit your target margin.
If you want a 50% gross margin:
Minimum viable price = COGS ÷ 0.50
So if your COGS is $11: minimum price = $11 ÷ 0.50 = $22.
If your COGS has risen to $14: minimum price = $14 ÷ 0.50 = $28.
That gap — from $22 to $28 — is the price increase you need. Not want. Need.
This is what “the data tells you to raise prices” actually means. It’s not a philosophy. It’s arithmetic.
How much should you raise your prices by?
Not all at once, necessarily. But the right amount is determined by the gap between your current price and your minimum viable price at your target margin.
A few things to keep in mind:
Don’t anchor to your old price. Your old price was set with old costs. It’s not the reference point. Your costs are the reference point.
Consider the full competitive context. If your materials went up due to tariffs, your competitors using the same materials are in the same position. You’re not raising prices in isolation — you’re probably all raising prices, whether or not everyone has realised it yet. Our guide on how tariffs are affecting Etsy sellers covers this dynamic in detail.
Wholesale pricing needs extra attention. If you sell wholesale, your retail prices need to leave enough margin to offer a reasonable wholesale discount (usually 50% of retail). If your COGS has gone up, your wholesale viability goes first. Check this before your retail pricing.
Don’t raise by $0.50 when you need to raise by $6. Small symbolic increases are worse than one honest increase. They signal uncertainty, they don’t fix the margin problem, and they require you to raise prices again soon. Do it properly once.
What about the fear of raising prices?
It’s real. Let’s not pretend it isn’t.
The fear usually takes one of two forms: that customers will leave, or that you’re not “worthy” of higher prices.
On the customer question — some customers will leave. That’s true. They’re usually the customers buying purely on price, not on quality or relationship. Losing them is often fine. The customers who value your work and your craftsmanship will stay, and you’ll be better paid per order as a result.
On the worthiness question — this is where data actually helps. When you can look at your COGS, show someone your material costs, and say “I have to raise prices because my costs went up 18% in the last year” — it stops being a confidence question. It’s just facts. You’re not asking for more because you feel like it. You’re adjusting because economics demand it.
One more thing worth remembering: makers who price too low attract a race to the bottom. Customers who want cheap have Amazon. Your customers who choose handmade are choosing something different. Price accordingly.
How to tell your customers about a price increase
You don’t owe an elaborate explanation. But a brief, honest note goes a long way.
If you sell on Etsy or Shopify: You can simply update your prices. Most customers won’t notice unless they’ve purchased before. For returning customers or email subscribers, a short note is a nice touch.
What to say: Something like:
“From [date], prices on [product category] will be increasing slightly to reflect higher material costs. If you’ve been meaning to stock up, now’s a good time. Thank you for your continued support — it means everything.”
Short. Honest. No grovelling, no over-explaining.
What not to do: Don’t apologise excessively. Don’t frame it as a personal failing. And don’t pre-emptively offer a discount to soften the blow — that signals the new price isn’t “real,” which makes the next increase even harder.
Frequently Asked Questions
How do I know if my handmade prices are too low?
Calculate your gross margin for each product: subtract your COGS (materials, labour, consumables, allocated overhead) from your selling price, then divide by the selling price. If the result is below 30–40%, your prices are likely too low to sustain the business — especially if you sell wholesale or have any fixed overheads. If you can't calculate COGS for each product, that's the first problem to fix.
How often should I review my handmade product pricing?
At minimum, review your pricing once a year — ideally at the start of each calendar year or financial year. But also trigger a review any time a key material increases in cost by more than 10%, a supplier raises their prices, or you take on new overhead. In a period of rising material costs like 2025–2026, quarterly reviews are worth doing for your highest-volume products.
Will I lose customers if I raise my prices?
You might lose some — specifically those buying purely on price. That's usually fine. Customers who value handmade quality, your specific craft, or a relationship with your brand are far less price-sensitive than you might think. A modest, well-communicated increase rarely causes significant drop-off. And the customers you do lose are often the ones eating your time and margin with small orders anyway.
How do tariffs affect what I should charge for handmade products?
Tariffs on imported goods increase the cost of many craft supplies — fragrance oils, pigments, packaging materials, hardware, and more. If your suppliers source from affected countries, your material costs have likely gone up in 2025–2026 even if the supplier hasn't sent a formal notice. The only way to know the impact on your specific products is to track COGS per unit over time. Craftybase does this automatically as you update material costs in your recipes.
What's the difference between raising prices and raising my rates?
For product-based businesses, a price increase covers both material cost increases and labour rate increases. If you've been undervaluing your time — which most makers have — a price review is also a chance to recalculate labour at a realistic hourly rate. Many makers discover that once they account for their time at even $15–20/hr, products that "seemed fine" are actually priced below cost. See our guide to calculating handmade labour costs for a worked example.
Does Craftybase help me track whether my prices need to increase?
Yes. Craftybase calculates COGS per unit automatically from your recipes and material costs. When your material costs change — because a supplier raises prices or tariff-driven increases flow through — your COGS updates across every product that uses those materials. You get a real-time view of your margin per product, so you know exactly when costs have drifted and by how much. No spreadsheet archaeology required.
The bottom line
Raising your prices is uncomfortable. That part doesn’t go away.
But the decision doesn’t have to be about confidence. It can be about data. When your cost to produce a product has gone up — and for most makers in 2026, it has — the maths will tell you what you need to charge.
The makers who stay profitable are the ones who know their numbers and act on them. Not the ones who feel most ready.
If you don’t yet have a clear picture of your COGS per product, that’s the place to start. Craftybase’s recipe costing gives you that view automatically — so the next time costs shift, you’ll know before your margins do.
