Working Out What It Costs You to Make One

Sources last read 2026-07-19.

Short answer

Work out what one of them costs you before you decide what to charge. Count everything that gets used up, not just the obvious material. Then count your own time at a number you chose. Most people who quit making things were sure they were making money right up until they did that sum.

The trap, in one sentence

"The wax cost two dollars, so I will charge six."

That is the sentence that quietly ends a lot of small businesses. The main material is one line. It is almost never the biggest one.

Everything that gets used up

Go and get a piece of paper. Write down every single thing that leaves your hands when one item gets made or one job gets done.

The main material. Wax, fabric, wood, beads, blank shirts, dog treats.
The small parts. Thread, glue, wicks, clasps, ink, tape. These are the ones people forget, and together they are often bigger than the main material.
Packaging. Bag, box, label, tissue, the sticker with your name on it.
The ones that go wrong. Every batch has some. They cost the same as the good ones.
Getting the stuff to you. Postage on supplies, or the ride to the shop.
Getting it to them. Postage out, packing tape, fuel if you drop it round.
Fees. If a service sells it or moves the money, it takes a cut. Read its own fee page and write the number down.
Your time. The big one. Its own section, below.

How to turn a big bag into one item

Most of what you buy comes in packs. So do one division for each line.

Price of the pack, divided by how many items it makes. That is your cost per item for that line.

A bag of wax at twenty four dollars that makes twelve candles is two dollars a candle. A box of twelve jars at eighteen dollars is a dollar fifty each. Keep going until every line has a number.

Then add the lines up. That is your material cost for one.

Now count the spoiled ones

You will ruin some. Everyone does, and beginners ruin more.

Do not pretend they did not happen. Divide by what you can sell.

If ten items' worth of materials gives you nine you would actually hand to somebody, then nine sales have to carry the cost of ten. Do that division and your number gets more honest immediately.

Your time is a cost, and it is usually the biggest one

This is the line people leave out, and leaving it out is how a business ends up paying you less than nothing.

Pick an hourly number for yourself. Time a whole batch, honestly. Include setting up, cleaning up, packing, and the trip to the post office.

Hours times your rate, divided by the number you can sell. That is the time cost of one item.

Add it to the material cost. Now you have what one actually costs you.

An example, to show the shape of it

Greta is 16 and makes candles. She was charging ten dollars and had no idea whether that was good.

She works in batches of ten. Her lines came out like this.

Wax, twenty four dollars a bag, twelve candles: two dollars each. Wicks, five dollars for fifty: ten cents each. Jars, eighteen dollars for twelve: a dollar fifty each. Fragrance oil, twelve dollars a bottle, enough for twenty four: fifty cents each. Labels, four dollars for twenty: twenty cents each.

Added up, that is four dollars thirty in materials for one candle. Ten of them is forty three dollars.

About one in ten comes out badly, so a batch gives her nine she would sell. Forty three dollars spread over nine candles is about four dollars eighty each.

A batch takes two hours, including cleaning up. She decided her time is worth twelve dollars an hour, so that is twenty four dollars, spread over nine candles, which is about two dollars seventy each.

Four eighty plus two seventy is about seven dollars fifty. That is what one candle costs her.

At ten dollars she is paid for her time and clears about two dollars fifty on top. That is a real business, and a thin one.

Here is the part worth sitting with. If she had priced off the wax alone and tripled it, she would have charged six dollars. Six dollars is less than what one costs her. She would have worked all afternoon to end up behind, and the sales going up would have made it worse.

Two things this number is for

Deciding your price. Your cost is the floor. What you charge sits above it, and there is a page here on picking that number.

Deciding what to make. Once you can do this sum, you can do it on a thing before you make a hundred of them.

Two things it does not cover

Sales tax may or may not sit on top of your price, depending on your state and what you sell. Some states have a small seller rule, and it does not always help a maker. Texas says outright that its occasional sales exemption does not cover artists or craftsmen who make items for sale. There is a page here on sales tax, and it is worth ten minutes.

The other thing is the story you are being sold. There is a whole industry telling people that a shop makes money because things sell. The federal trade regulator, the Federal Trade Commission (FTC), has taken several of these people to court. In one case the FTC found that for nearly all the customers, the promised gains never appeared. Revenue is not profit. This sum is the difference between the two, and it is why they never teach it.

Questions people actually ask

Do I really have to count my time? It does not cost me anything.

It costs you the afternoon. If you do not count it, you cannot tell the difference between a thing that makes money and a hobby that hands you back your own bus fare. Count it at a number you picked. You can always decide the hobby is worth it. You just want to know which one it is.

What about things I already own, like the sewing machine?

Do not push a whole machine into the cost of one item. That number will scare you off everything. Count what gets used up. If a tool wears out and gets replaced often, spread it over the number of items it lasts for.

How do I count the ones that come out wrong?

Divide by the ones you can sell, not the ones you made. Ten items of materials that give you nine good ones means the materials for ten are carried by nine sales. That single change fixes the sums for most people who make things by hand.

What about the fees the app takes?

They count, and they come off before you see the money. I am not printing the numbers here because they change and every service is different. Find the fee page on the service itself, read it, and put the figure into your sum as a line.

The number says I am losing money. Now what?

You have three moves and only three. Charge more. Get the cost per item down, usually by buying the boring parts in larger amounts. Or stop making that particular thing and make something else. Doing more of it faster is not on the list.

Where this came from

Texas Comptroller, occasional sales and who does not qualify
comptroller.texas.gov

Federal Trade Commission, crackdown on business opportunity schemes, September 2024
ftc.gov