When to raise your prices

Raising prices feels risky, so it tends to get put off. Meanwhile costs creep up, fees change, you get faster and better, and a price that was right when you listed it slowly stops paying you. The answer is not to raise prices on a whim, or never. It is to know the signs, check the numbers, and change prices for a reason you can explain.

This guide covers the signals that a price is too low, how much a cost increase should move your price, and how to make the change without fuss. Every check uses the pricing calculator.

Sign 1: your current price misses your target margin

The simplest check is to put the price you charge now into Check my current price and compare its margin with your target. The calculator shows fees, profit, margin and earnings per hour at your price, next to the suggested and charm prices.

Take worked example C, a small item on Etsy: $0.80 of materials, 5 minutes at $18 an hour, $0.20 of overhead, $1.00 shipping charged, $0.73 shipping cost, and a current price of $5.00.

	Your price	Suggested	Charm
Price	$5.00	$5.09	$5.99
Fees	$1.02	$1.03	$1.11
Profit	$1.75	$1.83	$2.65
Margin	29.2%	30.1%	37.9%
Earnings per hour	$39.00	$39.98	$49.75

At $5.00 the margin is 29.2%, just under a 30% target. The suggested price is only $0.09 more. If you move to the charm price instead, the profit per order rises from $1.75 to $2.65. Small items are where these few cents matter most, because the fees and your packing time are a large share of the sale.

Sign 2: your costs went up

When a supplier raises prices or postage goes up, your price has to move by more than the cost increase, because fees and margin apply to the extra cost too.

At Etsy’s fees and a 30% margin, each $1.00 of extra cost adds about $1.65 to the price (1 / 0.605). For example, if the $4.00 blank in worked example A went up by $1.00:

	Before	After
Cost per item	$11.50	$12.50
Suggested price	$23.67	$25.33
Charm price	$23.99	$25.99
Profit at suggested price	$8.90	$9.40

A $1.00 cost increase moved the suggested price by $1.66, not $1.00. If you had only added $1.00, to $24.67, the margin would have dropped to 28.7% and the profit to $8.81.

Keep your receipts and check your cost lines when you reorder supplies. The Craft Pricing Workbook (coming soon) has a materials library for exactly this: change a pack price once and every product that uses it is repriced.

Sign 3: fees changed

Etsy changes its fees from time to time, and card reader providers change their rates. When a fee changes, every price that was calculated with the old fee is out of date. Check Etsy’s fee page and your card reader’s pricing page every month or two, and re-run your best sellers when anything changes.

Sign 4: your time is worth more

As you get more skilled, your hourly rate should go up, and that moves your price. In worked example A, raising the hourly rate from $20 to $30 moves the suggested price of a 15-minute mug from $23.67 to $27.81. Our guide to setting your maker hourly rate shows the full comparison.

Sign 5: demand is ahead of you

Some signals are not in the calculator at all:

• Items sell out faster than you can make them.
• Your custom slots are booked up ahead.
• Buyers rarely ask about price, but often ask about availability.
• You turn down work because you do not have the time.

Each of these says buyers would likely pay more. A higher price can also reduce demand to a level you can keep up with, which is better than burning out on underpriced orders.

Sign 6: one product pays far less per hour than the rest

Compare the earnings per hour of your products. If one design pays you much less per hour than the others, either its price is too low or it takes more time than you thought. Time it again; if the minutes are right, raise its price or retire it.

How to raise prices without fuss

• Have a reason. Higher costs, new fees, better materials or more time are all fair reasons, and knowing yours makes the change easier to explain if anyone asks.
• Use the calculator, not a round guess. Raise to the suggested or charm price for your target margin, so the new price is right rather than just higher.
• Start where it matters most. Begin with best sellers, new listings and custom work, where underpricing costs you the most.
• Honor what you have already quoted. Keep promised prices for orders and custom quotes already agreed.
• Tell regular buyers if you like. A short, friendly note is enough. Most of the time, no announcement is needed for a small change.
• Watch the results. Check sales and messages over the following weeks. If a product stops selling, look at its price against similar listings that are selling, and at whether you can save minutes or materials.

What not to do

• Do not lower your margin to avoid raising a price after costs went up. That only moves the cost increase out of your profit.
• Do not cut your hourly rate to hold a price. That is paying for the change out of your wage.
• Do not raise prices across your whole shop by the same percentage without checking. Each product’s costs and fees are different, and the calculator will give each one its own number.

Make price checks a habit

Pick a regular day, such as the start of each month, to look at Etsy’s fee page, your recent supplier invoices and your top products’ margins. When everything still checks out, you can stop worrying about it until next time. When something has changed, you will catch it before months of sales go by at the old price.

Questions sellers ask