Most pricing advice for candle makers stops at cost, and cost is the easy half. Knowing a candle costs you €12.30 does not tell you what to charge for it - not once a marketplace takes its cut, not once you post it, not once you run a sale, and certainly not if you ever want a shop to stock you.
This guide picks up where calculating the true cost of a product leaves off. Same workshop, same candle, same numbers. The question here is the next one: what price actually clears all of it, and how do you work that out rather than guess?
Start from the cost of the candle you actually ship
The worked example is a candle workshop making 1,200 candles a month. Per candle, before anyone sells anything:
| Line | Per candle |
|---|---|
| Raw materials (wax, fragrance, wick, jar, lid) | €6.25 |
| Labour (6.5 minutes of the batch, at a real hourly cost) | €1.95 |
| Workshop overhead | €1.30 |
| Packaging - posted order (mailer, filler, label) | €2.80 |
| Cost of one posted candle | €12.30 |
Two things about that table matter for pricing.
It is the posted candle, not the average one. The same candle handed over at a market stall needs a box and tissue paper, not a mailer and filler, and costs €10.40. Averaging the two gives you €12 and change for a candle that does not exist. Price the channel you are actually selling through. Where the two costs are far apart, the two channels deserve different prices.
Postage is not in it. The €2.80 buys the mailer, the filler and the label - not the stamp. A glass candle is heavy and fragile, and the postage on one is rarely under €5 domestically. It has to land somewhere, and we come back to exactly where in a moment.
If your own version of this table does not exist yet, build it first: how to calculate direct materials cost covers the biggest line, and the free candle pricing calculator will do the arithmetic on your own wax and jar prices without you signing up for anything.
What Etsy actually takes off a €24 candle
Say the candle is listed at €24 with shipping included in the price. Etsy's cut is not one number. It is three on every order, plus a fourth that lands on some of them whether you like it or not, and only one of the four is the number people quote:
| Fee | Rate | On €24 |
|---|---|---|
| Listing fee | €0.20 flat | €0.20 |
| Transaction fee | 6.5% | €1.56 |
| Payment processing | ~4% + €0.30 | €1.26 |
| Total, ordinary order | ~10.5% + €0.50 | €3.02 |
Payment processing varies by country - check your own rate rather than trusting the 4% above, it is a placeholder for a number that differs between Finland, the UK and the US. The Etsy fee calculator has a preset per country and every rate editable. The shape is what matters: a percentage and a fixed amount. The fixed amount is why cheap products are disproportionately expensive to sell. On a €24 candle, €0.50 of flat fees is 2% of the price. On a €6 wax melt it is over 8%.
So the candle that looked like it had a 48.8% margin on the workshop floor (€24.00 less €12.30, over €24.00) is really this:
margin = 8.68 ÷ 24.00 = 36.2%
Twelve points of margin, gone to a line that never appears in any costing spreadsheet. And that is the good version of this order, because it assumes no advertising fee, no discount and no free shipping. Each of those is below.
The handmade pricing formula
Adding a markup to cost and hoping is the wrong direction, because the fees are charged on the price you have not decided yet. Solve for it instead:
For our candle, aiming at 40%, shipping charged separately so postage is not in the price:
= 12.80 ÷ 0.495 = €25.86
Check it: at €25.86 the fees come to €3.22, the cost is €12.30, and €10.34 is left. That is 40.0% of the price, exactly as asked. Want 50% instead? The same formula gives €32.41.
This is the whole trick, and it is why a target margin is a more useful thing to decide than a price. You choose what the work is worth to you, and the arithmetic tells you what to put on the listing. The pricing calculator runs this both ways on your own figures - cost to margin, and margin back to price.
One caution on the word itself: margin and markup are different calculations and swapping them underprices you badly. A 40% markup on €12.30 is €17.22, not €25.86. Both are spelled out in the product cost formula reference.
The fee you do not control
Etsy's Offsite Ads fee is charged when a buyer reaches your listing through an advert Etsy paid for. It is 15% of the order for most shops (12% for larger ones), on top of everything above, and once your shop passes a certain annual turnover you cannot opt out.
On the €24 candle, one Offsite Ads order looks like this:
left after cost: €24.00 − €12.30 − €6.62 = €5.08 (21.2%)
Pricing every candle as if every order were an Offsite Ads order pushes the 40% price from €25.86 to €37.10, which is not a real price for this candle. Pricing as if none of them are is how a good month quietly turns into a thin one. The honest answer is to blend: look at what share of your orders actually carried the fee last quarter, and add that share of 15% to the variable rate. At one order in five, the variable rate goes from 10.5% to 13.5% and the price from €25.86 to €27.53.
That €1.67 is not a rounding error you can absorb. It is the difference between a shop that makes its target margin and one that misses it by three points every month without ever finding out why.
Why the "multiply materials by four" rule underprices handmade work
Every craft forum eventually offers the same shortcut: materials x 2 is your wholesale price, materials x 4 is your retail price. For our candle it gives €25.00, which is remarkably close to the €25.86 we calculated. So what is wrong with it?
What is wrong is that it multiplies the one input that has nothing to do with how long the work takes. Consider two candles from the same workshop with identical materials at €6.25:
| Plain poured | Hand-decorated | |
|---|---|---|
| Materials | €6.25 | €6.25 |
| Labour | 6.5 min · €1.95 | 25 min · €7.50 |
| Overhead + posted packaging | €4.10 | €4.10 |
| True cost | €12.30 | €17.85 |
| Price by the x4 rule | €25.00 | €25.00 |
| Margin after Etsy fees | 38.3% | 16.1% |
The rule prices both candles the same because their wax costs the same. One of them is a healthy product and the other is barely worth switching the melter on for, and nothing in the shortcut can tell them apart. The more the value of your work sits in your hands rather than in your materials - and for handmade goods it usually does - the worse the rule serves you.
Keep it as a sanity check if you like. If your calculated price is wildly below materials x 2, something in your costing is wrong. Do not use it as the calculation.
Decide about wholesale before you set the retail price
Wholesale is not a discount you offer later. It is a constraint on the price you set today, because a stockist expects to buy at roughly half your retail price and to sell at that retail price themselves. Run it on our candle.
A wholesale candle does not need a mailer per unit - it goes in a bulk box - so the cost drops to about €10.40. At half of the €25.86 retail price, you would sell it at €12.93:
For a wholesale order of 200 candles you would take €506, out of which comes packing, a pallet or courier, an invoice and the payment terms that go with it. It is not obviously worth doing.
Turn it around. If you want 40% on wholesale orders, the wholesale price has to be €10.40 ÷ 0.60 = €17.33, which means a retail price around €35, not €26. That is a genuinely different shop - different photography, different jar, different customer - and it is not a decision you can make retroactively. Repricing a €24 candle to €35 in front of the customers who already bought it at €24 is a much harder day than setting €35 in the first place.
So answer it early. If you never want stockists, price for retail and ignore all of this. If you might, the doubling has to be in the number from day one.
Four things that quietly eat the margin you set
1. Free shipping is the most expensive thing on the listing
Marketplaces push free shipping hard, and it is not free - it just moves the postage into the price, where the percentage fees can also be charged on it. If postage on the candle is €6, the 40% price goes from €25.86 to €37.98. That is not a markup, that is arithmetic: the money has to come from the same order.
The useful thing to know is that listing at €31.98 plus €6 shipping and listing at €37.98 with free shipping leave you exactly the same money, because Etsy charges its transaction fee on the shipping either way. The buyer pays €37.98 in both cases. The only real difference is which number they compare against other shops, which makes it a marketing decision rather than a financial one.
2. A sale comes off the price but not off the cost
The candle still costs €12.30 during your sale. At the €25.86 price:
| Discount | Buyer pays | You keep | Margin |
|---|---|---|---|
| None | €25.86 | €10.34 | 40.0% |
| 20% off | €20.69 | €5.72 | 27.6% |
| 30% off | €18.10 | €3.40 | 18.8% |
A 30% discount does not cost you 30%. It costs you more than half your profit, because the whole discount comes out of the margin rather than out of the price. Knowing that in advance is the difference between a sale you chose and a sale that happened to you.
3. VAT, if you are registered for it
A price shown to a consumer includes VAT, and that portion was never yours. On a 24% rate, the €25.86 the buyer pays is €20.85 of revenue and €5.01 of somebody else's money - while the marketplace still charges its fees on the full €25.86. Take VAT out of both sides before you compare anything: net price against net cost. Comparing a VAT-inclusive price with costs whose input VAT you reclaim will make every product look better than it is.
4. Breakage and returns on posted glass
If one posted candle in forty arrives broken and you replace it, you pay for that candle twice and post it twice. Spread across the forty orders that is about €0.46 each, or nearly two points of margin - small enough to ignore and steady enough that you should not. Put it in the price rather than discovering it in the bank balance.
Keeping the price right after you have set it
The reason handmade pricing goes wrong is rarely the first calculation. It is that the calculation was done once, in a spreadsheet, and the workshop kept moving: wax went up 11% over the autumn, the jar changed supplier, the recipe gained a second label, the fragrance load went from 8% to 10%. None of those events prompts anyone to reopen the pricing sheet, and a year later the sheet describes a candle you no longer make.
That is the part Masto Control is built to hold. Your recipe is a product card, every purchase is its own batch at the price you actually paid, production consumes the oldest batch first, and the cost per candle moves on its own when your supplier's prices move. Packaging is set per sales channel, so the posted candle and the market stall candle carry their own costs instead of one average. Your sale price sits on the card next to that cost, so the margin is a number you can look at rather than one you recompute by hand. When an Etsy order arrives, stock comes down, the materials are consumed at real batch cost, and the channel commission is recorded separately from the cost of goods, so the product margin report shows what the sale actually left you.
Where the boundary is, so nothing here is a surprise: channel commission is a single percentage per channel, which covers Etsy's percentage fees but not the flat €0.20 listing fee or the fixed part of payment processing. Labour is costed from an hourly rate and the minutes you put on the card, but nothing times the work for you, so those minutes are your estimate rather than a measurement. And it does not set your price - it keeps the cost side honest so that the price you set stays the price you meant.