Have you ever added up all the hours you spent on a product and realized you made about three bucks an hour? Yeah — I've been there.
Developing handmade products with good margins is hard. By nature, they're made by hand to some degree, which takes time, and time is a costly resource. In fact, that's the big theme running through this whole post: time equals money. As makers, we forget that a lot because we get excited and love spending time on our craft.
But here's the truth — you have to build strong enough margins to keep doing this work long-term. Every time you free up time or cut unnecessary costs, you increase profitability and put more money in your pocket.
Today I'm sharing 9 overlooked ways to increase the profit margins on your handmade products. I've personally tested just about every single one of these, so I know they work. Tip #8 is a bit contrarian, but it's full of potential, so keep reading.
What Is Profit Margin, Exactly?
Before I get into the list, let's get clear on what profit margin actually means. I know most of you already know this, but just in case we have some new business owners reading, let's do a quick refresher.
Profit margin is what's left in your pocket after you subtract the cost of making your product from the price you sold it for.
For example, if you sell a candle for $20, and the wax, wick, jar, and label cost you $8 total, your profit is $12 and your profit margin is 60%.
That dollar amount ($12) is your actual profit. The percentage (60%) is your margin, and it tells you how profitable that product really is.
If you're a casual hobbyist, these numbers might not matter too much to you. But if you want to turn your handmade product business into something you can actually live off of, these numbers matter a lot. And they matter even more if you ever want to wholesale your products to other retailers.
Once you have a clear view of your profit margins, it changes how you think about which products are actually worth your time. Now let's get into the list!
1. Batch Assemble Your Products
When you batch assemble, you get into a flow state that helps every step move faster. Less time invested per product means more profitability overall.
There are two ways to act on this idea:
- Making a larger batch of product at once, instead of one at a time, or
- Breaking that batch down into smaller, assembly-line-style steps
Think about how you can break the making of your product into logical steps. Consider whether rearranging your workspace, or investing in a few assistive tools, would help you move through each batch more quickly.
That covers saving time. But there's another side to the profit margin equation — saving money on what you're buying in the first place. Let's talk about bulk ordering.
2. Bulk Order Your Supplies
Ordering larger quantities of supplies usually results in a lower cost per piece.
I'll be honest, this can take a little time to ramp up. I remember being nervous the first few times I ordered 100 of something, and then I hit a new wave of fear when I needed to order more than 100 of something.
Keeping records of how much of each supply you go through will help you feel more confident placing bigger orders. And here's a bonus tip: try to order when things are on sale. Do a quick search for a coupon code before you check out—10% off is 10% back in your pocket.
If your products are manufactured using your own handmade artwork or designs, this exact same principle applies to bulk ordering finished goods, too.
3. Bulk Order Your Manufactured Products
The same logic applies here: larger quantities drive down your cost per piece.
Again, it can take time to build the confidence to place bigger orders. Keeping records of how much product you go through will help you feel more secure doing this. It's also worth watching for seasonal discounts. They're a little harder to find in the manufacturing space compared to raw supplies, but some vendors do run occasional sales.
There's another bonus to bulk ordering supplies and finished products: placing fewer, larger orders saves you time. And what is time? Money.
Bulk ordering helps you get more value from the vendor you already use. But it's also worth stepping back every so often and asking whether that vendor is still the right one.
4. Price-Shop Your Vendors
You probably did this when you first started your business, but it's a smart idea to check around every year or so to see if you can find a lower-cost vendor offering the same quality for less.
While you're at it, recalculate your total cost of goods for each product from time to time. Prices tend to creep up little by little, and it can be hard to notice exactly how much that's impacting your margins until you sit down and do the math.
Price-shopping your vendors helps you save money on what you're already buying. But there's another category of cost a lot of makers never question — the cost of doing absolutely everything themselves.
5. Consider What You Can Outsource
A lot of makers fall into the trap of doing everything themselves, like printing their own stickers or cutting their own tags, because it feels cheaper, because that's how they've always done it, or because they assume that's what a "handmade business" requires.
But it's often not worth printing every sticker or tag yourself. Once you account for your time, you may find you're not actually saving anything.
Wouldn't you rather spend your time creating new product ideas or connecting with customers, instead of trying to get your Cricut to cut through sticker paper?
Think about which parts of your product and packaging could be outsourced. Labels, tags, bands, and other packaging components are great candidates for a professional printer.
While you're at it, consider whether any part of your actual product could be manufactured. Items I often see makers hand-producing that probably don't need to be include stickers, bookmarks, greeting cards, art prints, and other paper goods. There's really no reason to print and cut those yourself. Plenty of other product types can be outsourced, too.
I want to debunk a common myth here: a "handmade product business" doesn't require every single piece to be made entirely by hand. If you created the idea, the artwork, and assembled any portion of the final product, it's still a handmade product.
This also doesn't have to be all-or-nothing. You can outsource some components while still hand-making others. Maybe you love making your products completely by hand, or maybe there's genuinely no way to outsource any part of your process—and if that is the case, that's completely fine. But at least give it some thought, especially if your goal is to grow your business into something that can sustain you financially.
Once you stop trying to do everything yourself, you'll likely start looking at your entire process with fresh eyes, which brings me to something a lot of makers over-invest in: product packaging.
6. Reduce Your Product Packaging
Look closely at what's inside your product packaging:
- Removing components saves hard costs
- Removing steps saves time
- Standardizing sizes lets you reuse the same packaging across multiple products
And it's not just the packaging around your product itself. Your shipping packaging deserves the same level of scrutiny.
7. Reduce Your Shipping Packaging
The same principles apply here: remove unnecessary components, remove extra steps, and standardize your sizes wherever possible.
Ask yourself honestly: Does your customer really want that free sticker? Does the product really need to go inside a bag, that is then placed inside a box? I see makers do this constantly, and it drives me a little bonkers. You can absolutely create a beautiful unboxing experience without 27 extra add-ons. Think carefully about what you can cut.
Extra bonus tip: reuse the packaging materials you receive from your own suppliers whenever you can, because a dollar saved is a dollar more profit!
Now that we've covered packaging on two fronts, let's zoom out. The next tip isn't about a single product — it's about your entire product lineup, and it's a little controversial.
8. Reduce Your Number of Product Options
The advice on social media and in most product-business circles keeps repeating the same message: "make another product" or "offer it in another color." I think that advice needs to be taken with a big grain of salt.
Creating new products or adding extra options is costly, both in time and in cash. Sometimes expanding your line makes sense. Sometimes it just creates a lot more work, for not much of a reward.
Take a hard look at your current products. What's selling best? What's a giant pain to produce or sell? Where are your margins genuinely miserable? Could you simply discontinue an unpopular color or size?
Fewer products will often push more sales toward your remaining bestsellers. And when you have fewer products to manage overall, you spend less time producing and packaging, which saves time (which is money!) and naturally paves the way for bulk ordering.
Once you've simplified your lineup, there's one more lever to pull, and it's both the most straightforward option on this list and the one people are most afraid to use.
9. Raise Your Prices
It's not uncommon for makers to underprice their own goods. I think a lot of us either feel guilty setting a fair price, or we assume we'll sell more by pricing low.
Instead, research your market and price in line with what comparable sellers are charging. If your product offers more features or value than similar options, you can likely price a bit higher, especially if demand has shown that customers aren't very price-sensitive. If your product has fewer features than comparable products, you may need to price a bit lower.
Unless your product is a true commodity (meaning it's basically identical to your competitors' product), pricing below the market won't necessarily win you more sales. In my space, I see a lot of sticker and card designers make this mistake. People connect with the style and concept of a sticker or card, not the price tag, so underpricing that kind of product usually just hurts your own bottom line.
Most people buy handmade goods because they connect with them on some level, not because of price alone. Even a small increase of 50 cents or a dollar can add up significantly over a full year of sales. And if wholesaling is part of your future plans, you may need to raise your prices a bit to make that math work.
Keep a Balanced Perspective
Before I wrap up, I want to leave you with one more way of thinking about all of this, because it's easy to take some of these tips too far.
All those small 25-cent additions to your product or packaging really do add up, so think carefully about every add-on. Saving even a quarter or 50 cents per product adds up fast, especially on items you sell in high volume.
But always balance those savings against the actual value you're providing. Look for genuinely low-value things to cut—things like packaging that customers throw away immediately, or small details you personally love but have never once heard a customer mention.
This is a project that never really ends. I'm eight years into my handmade business, and I'm still finding new ways to streamline my offerings and improve my margins.
Frequently Asked Questions
What is a good profit margin for handmade products? Many successful handmade product businesses aim for a profit margin of 50% or higher, though this varies by category, materials, and labor involved. If you want to wholesale your products, you really need to have at least a 75% margin. The right margin for your business depends on your costs, your time investment, and your growth goals, especially if you plan to wholesale.
How do I calculate profit margin on a handmade product? Subtract your total cost of goods (materials, packaging, and any other direct costs) from your selling price. Divide that number by your selling price and multiply by 100 to get your profit margin percentage.
Does a handmade product have to be 100% made by hand? Nope! A product can still be considered handmade even if certain components, like labels, tags, or paper goods, are outsourced to a manufacturer. What matters is that you created the idea, the design, and assembled or finished the product yourself.
What's the easiest way to improve profit margins quickly? Raising prices is often the fastest way to improve margins, but reducing unnecessary packaging, bulk-ordering supplies and manufactured products, and outsourcing time-consuming, low-skill tasks like cutting stickers or tags can make a quick, noticeable difference.
Got any other tips for improving profit margins on your handmade products? I'd love to hear them — drop your best tip in the comments below.
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