THE WORKSHOP GUIDE · 18 OCTOBER 2026

Price the whole piece.
Include the time it takes.

A useful price starts with a complete view of one item's costs. It is easy to count a jar and its wax but leave out labels, packaging, failed pours and your time.

1. Work in one currency and one finished item

If a 1,000 g bag of material costs $12, its unit cost is $0.012 per gram. A recipe using 180 g consumes $2.16 of that material. Repeat this for each ingredient or component. Keep purchase quantities and recipe quantities in the same unit.

For pricing decisions, you may want to use what it would cost to replace your materials now. That is different from historical cost or inventory valuation for accounting.

2. Divide batch time across finished items

If producing 10 items takes 120 minutes of labour, that is 12 minutes per item. At an hourly rate of $20, labour adds $4 per item. Consider setup and cleanup as well as assembly. Do not count waiting time as labour unless that matches your actual working arrangement.

3. Allocate the costs that do not fit a recipe

Packaging, reasonable waste allowances and a share of overhead can change the answer. Put the amounts you choose to allocate into the calculation; it cannot infer costs you leave out. If you pay shipping, include that cost too.

4. Keep markup and margin separate

A markup is a percentage of cost. A margin is a percentage of selling price. A $10 cost plus a 30% markup gives a $13 price. The $3 remaining is 23.1% of the selling price before any selling fees.

For a target margin after the fees included in the model, use:

Price = (production cost + fixed selling fee) ÷ (1 − percentage selling fee − target margin).

5. Work through an example

Illustrative inputs: materials $4.50, packaging $0.80, labour $4.00 and other costs $0.70. Total included production cost: $10.00. Assume an 8% percentage selling fee, a $0.30 fixed fee per item and a 30% target margin.

($10.00 + $0.30) ÷ (1 − 0.08 − 0.30) = $16.6129… . Rounding up gives $16.62. Fees at that price are about $1.63. About $4.99 remains after included costs. This is not net accounting profit: omitted costs and tax may still need to be paid.

For a material-by-material breakdown and batch yield example, see candle pricing: from one batch to a price per jar.

6. Check the real sales channel

Fees may apply to shipping or tax, may include advertising, or may be charged per order rather than per item. Enter the effective assumptions for your transaction. For multi-item orders, allocate a fixed order fee appropriately. The calculator's example values are not a fee schedule for any marketplace.

7. Treat the answer as a decision input

The calculated price shows what would achieve the chosen margin under the entered assumptions. It does not tell you what customers will pay. Compare the price with real demand, product positioning and your production capacity. If it does not fit, revisit the costs, format or channel rather than silently dropping your labour.