Pricing: hourly rate and margin

In short: A good price covers material, fees, time, taxes and a buffer. You work from the desired hourly wage and the cost per item up to the selling price.

In more detail: A typical mistake: counting only material costs and forgetting your own working time. The formula: selling price = material costs + incidental costs + (time × hourly rate) + profit margin. Platform fees and shipping must be included.

In detail

• Hourly rate: desired wage plus a share of fixed costs, divided by realistic billable hours.
• Margin: (price − purchase cost) ÷ price. For a 40% margin divide the purchase cost by 0.6.
• Fixed costs: software, domain, insurance, account fees, spread over the expected number of units.
• Check market price: what do customers pay, what do competitors charge?
• Test the price: better start small and adjust.
• Minimum price: anything below your own costs is a loss, even if revenue rises.

See also: Revenue and profit: the difference, Business income and business expenses