How to Price Custom Orders So You Get Paid for Your Time

Short answer: to price a custom order, add four things. These are the materials for that order, your time at a fair hourly rate, a share of your overheads, and a profit margin. Then add extra for anything that makes this order harder than usual, such as revisions or a rush date. Finally, compare the price with what similar sellers charge. If you sell on a marketplace, allow for its fees as well.

Government business guides describe the same method, called cost-plus pricing. Australia’s business.gov.au says to work out the total cost of making and supplying your product, including materials, labour, overheads and taxes. Then you add a mark-up. Business Wales gives the same advice and adds a warning. Do not simply match your competitors without first working out your own costs.

Custom work needs a little more care than a standard product, because no two orders are the same. The steps below give you a method you can repeat for every quote.

Why custom work is often underpriced

Most makers underprice for three reasons.

They only count the making time. A custom order also takes messages, sketches, changes, shopping for materials, packing and delivery. That time is real work, even if it does not feel like it.

They forget the costs that are not on the order. Electricity, tools, packaging, phone data and app subscriptions are all part of the business. Each order needs to pay a small share of them.

They copy someone else’s price. Another seller may work faster, buy materials more cheaply or simply be losing money. Their price tells you about the market, but it does not tell you your costs.

1. Add up the materials

List everything that goes into this order, and use the amount you will actually use. If a ball of yarn costs 8 and you use half of it, count 4. Include the small things too, such as thread, boxes, ribbon, labels and printing.

If the customer asks for something special, such as a rare fabric or an extra tier, price it from the actual cost. Do not use your usual average.

2. Count your time

Choose an hourly rate. A good starting point is what you would earn per hour in another skilled job where you live. Never go below your local minimum wage.

Then count every hour the order will take:

• Messages and questions before the order is confirmed
• Design, sketches and changes
• Buying materials
• Making the item
• Finishing, photos and packing
• Delivery or meeting for pickup

Time yourself on a few orders if you are not sure. Most sellers are surprised by how long the non-making work takes.

3. Add a share of your overheads

Overheads are the costs of running your business that do not belong to one order. Add up what you spend in a typical month on tools, equipment, utilities, subscriptions, marketing and packaging stock. Divide that by the number of orders you usually take in a month. Add the result to each order.

If your overheads are 120 a month and you take 12 orders, each order carries 10.

4. Add your profit

Materials, time and overheads are your costs. Profit is what the business keeps after paying you for your time. It pays for new tools, slow months and growth.

Choose a percentage and add it to your total cost. There is no rule for the right number. Business Wales notes that if you are unsure, it is easier to start higher and lower your price later than to raise it.

These numbers are only an example. Use your own costs, rate and margin.

5. Charge for what makes custom work harder

Custom orders carry costs and risks that ready-made items do not. You can cover them in a few clear ways.

• A design fee. This pays for sketches or mock-ups before work starts. Some sellers take it off the final price if the customer goes ahead.
• A set number of revisions. For example, two rounds of changes are included, and more are charged by the hour.
• A rush fee. If a customer needs the order sooner than your usual lead time, charge extra for moving other work. Our order deadline calculator helps you check whether a date is possible.
• A deposit. A custom item is hard to sell to someone else if the customer cancels. A deposit covers your materials and your time. Our guide on how much deposit to take looks at what real sellers charge.

Put these terms in your quote. Then the customer knows the price of a change before they ask for it.

6. Check the price against your market

Now look at what similar sellers charge for similar work. business.gov.au calls this competition-based pricing, and it also describes value-based pricing, where the price reflects what the customer thinks the item is worth.

Use the market as a check, not as a starting point:

• If your price is much higher, look for costs you can lower, or explain the difference clearly. Better materials, faster replies and progress updates are all reasons to pay more.
• If your price is much lower, you have probably left something out. Check your time and overheads again.
• If you are always fully booked, your price is likely too low.

business.gov.au recommends reviewing prices at least once a year, or whenever costs or market conditions change.

Pricing on Etsy and other marketplaces

Marketplaces charge fees on each sale. Most are a percentage of the price, so they grow as your price grows. Add them in a way that keeps your profit the same.

Divide your price by one minus the total fee share. If fees come to 10% of the sale, divide by 0.9. In the blanket example, 228.00 divided by 0.9 is about 253.33. That price still leaves you 228.00 after fees.

Fee rates differ by platform and country, and they change. Check the platform’s own fee page before you set a price. Our article on Etsy fees for independent sellers explains Etsy’s fee types and what Etsy reports as its total share.

Quoting the price to your customer

A clear quote prevents arguments later. Send it in one message with the full price, what is included, the deposit, the balance and the due date.

If the customer asks for a lower price, change what is included instead of cutting your rate. A smaller size or simpler design keeps your hourly rate the same.

How WISMO does this

WISMO does not set prices for you, but it shows whether your prices are working. These features are free on every plan.

• A cost on each catalogue item. Save what one unit costs you, and it fills in when you add the item to an order. You can also add your own cost to any order.
• Profit by item in Stats. See which items earn the most profit for the month, so you know which prices to raise.
• Deposits and balances on every order, so a quote and its payments stay together.

Your first 30 orders are free. See the features page for the full list.