The Secret to Profitable Pricing for Handmade and Small Business Owners

One of the most common misconceptions new business owners have is that making money is the same as being profitable. This is far from the truth. 

While making money in your business is essential, making sure your business is profitable is crucial. 

Having more revenue is not equal to being profitable. 

This is the reason why most businesses will be making money yet see none of it. They have no idea where the money is going. 

Imagine actually keeping more of the money you make—knowing exactly where it’s going and ensuring every sale brings you real profit. No more guesswork or wondering why your bank account doesn’t reflect your hard work.
If you’re ready to skip the guesswork and implement a proven pricing strategy that ensures profit, Price to Profit– Course will guide you step by step. Join now and start pricing with confidence!

Making a profit is not the same as ensuring you sell your products with a good margin. It is to make profits in your business so you can grow and run sustainably in the long run. 

Let’s look at key things you need to consider to ensure you run a profitable business.

A lot goes into pricing your products. 

You don’t need complicated math; a basic understanding is enough to price your products strategically.

We start by identifying all expenses, not just the cost of the product. Running a profitable business means accounting for every expense required to keep it operating smoothly.

One-Time Costs: What They Are and How to Plan for Them

When running a business, certain expenses are essential for smooth operations. Many of these are one-time investments that lay the foundation for your business.

Here are some examples of one-time costs to consider (though not all may apply to your business):

• Equipment
• Machinery
• Office furniture
• Website development
• Branding materials (logos, packaging, etc.)
• License or permit fees
• Business registration costs
• Software systems, and more

By accounting for these one-time expenses upfront, you can allocate your resources wisely and set your business up for success.

One-time costs like equipment, branding, and website setup add up fast. But if your pricing doesn’t cover these, you’re starting at a loss. Price to Profit– Course helps you price strategically so every sale moves you toward profitability. Join now and price with confidence!

Overhead Costs: Essential Expenses Every Business Needs to Cover

These are recurring expenses in your business, whether monthly or yearly. While some may not apply to your business, it’s important to account for them. Here are a few examples:

• Website hosting
• Platform fees
• Software subscriptions
• Warehouse rent
• Utility bills
• Loan repayments
• Employee salaries or freelancer payments
• Other recurring subscriptions

Planning for these costs ensures your pricing covers all expenses and keeps your business profitable.

If your pricing doesn’t account for overhead costs, you’re losing money—even when making sales. Running a business isn’t just about revenue; it’s about profit. Price to Profit– Course teaches you how to price your products to cover costs and maximize profit. Join now and start pricing smarter!

Variable Costs: How They Impact Your Profitability and Pricing

Variable costs fluctuate based on your sales and business activity—they rise as sales increase and decrease during slower periods. While some may not apply to your business, here are common variable costs to consider:

• Brand packaging
• Marketing expenses
• Shipping costs
• Transaction fees
• Raw materials
• Production costs
• Commissions (if applicable)
• Taxes (sales or VAT)
• Utilities (based on usage)
• Customer support services

Understanding these costs is crucial for setting profitable prices and maintaining healthy margins.

Every sale comes with hidden costs—are you accounting for them? If not, you’re missing out on profit. Price to Profit– Course gives you a step-by-step strategy to ensure your pricing covers all expenses, so you keep more of what you earn. Don’t wait—Join now !

Cost of the Product: Calculating the True Cost of Your Handmade Products

Pricing your handmade products starts with knowing exactly how much they cost to make. This goes beyond just the raw materials—you also need to factor in:

• Material Costs – Fabrics, beads, wood, clay, metals, paints, or other supplies.
• Packaging & Branding – Boxes, wrapping, labels, business cards, and other presentation elements.
• Shipping to You – Any costs for materials or supplies getting delivered to you, including customs and taxes.
• Production Costs – If you use special tools, molds, or machines, consider their maintenance and replacement over time.

If you’re making products yourself, add up all these expenses for a batch of items, then divide by the total number of finished products to get your cost per item. This ensures you’re covering every expense before setting a price.

By accurately calculating your costs, you can price your handmade products strategically, ensuring you make a profit on every sale rather than just breaking even.

Many handmade sellers unknowingly undercharge, eating into their profits. Price to Profit– Course helps you calculate every expense and price confidently. Join now and start pricing for real profit!

Profit Margins: How to Set Prices That Ensure Profitability

Before setting your selling price, it’s crucial to factor in a profit margin. This ensures the long-term sustainability of your business. Profit margins are expressed as a percentage of the selling price that remains as profit after covering all costs.

Here’s how to include profit margins in your pricing:

1. Calculate Total Costs – Add all expenses, including fixed costs (rent, software) and variable costs (materials, packaging, shipping).
2. Set Your Profit Margin – Choose the percentage of profit you want per sale. For example, a 30% margin means 30% of the selling price stays as profit.
3. Use the Profit Margin Formula:

To calculate the selling price, use this formula:

Example: If your total costs are $50 and you want a 30% profit margin:

We can round it off to $71.

Including a well-thought-out profit margin ensures your prices reflect the actual value of your products while supporting your business’s financial health.

Your profits start with the right formula. Get the Profit Margin Formula Sheet and start pricing smart! Grab yours today!

Track Your Finances: Why Monitoring Cash Flow is Crucial for Business Success

None of your pricing strategies will matter if you don’t monitor your finances. Understanding your numbers is the foundation of a profitable business.

The first step is simple—track everything. 

Know exactly how much money is coming in from sales and how much is going out in expenses. This includes material costs, packaging, shipping, software subscriptions, marketing, and transaction fees.

Without proper tracking, you may think you’re making money when, in reality, your profit is disappearing into hidden costs. Many business owners price their products without fully understanding their expenses, leading to underpricing and lost profits.

Consider using spreadsheets, accounting software, or apps that simplify financial tracking to manage your finances. Regularly reviewing your income and expenses helps you make informed decisions, adjust pricing when necessary, and ensure your business remains sustainable.

Without tracking your finances—every cost and every sale—you could be underpricing without realizing it. Price to Profit– Course gives you a step-by-step system to calculate your actual costs, set profitable prices, and ensure your business stays sustainable—no more guesswork—just clear, strategic pricing that guarantees profit.
💡 Ready to take control of your numbers and price with confidence? Join Price to Profit– Course today and start pricing smarter!

What’s next:

Pricing your products is a strategic decision and should not be done arbitrarily. If you wish to learn how to price your products strategically, it will help you sell more and ensure you run your business profitably. Check out the Pricing for Profit Course.

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