Setting Your Selling Price and Margin

Once you have a product cost, you need to set a selling price. CrafterBy gives you two approaches and shows you the resulting profitability either way.

Two approaches to pricing

Approach 1: Enter a price, see the margin

Type in the price you intend to charge. CrafterBy calculates the resulting gross margin and displays it. You can adjust the price and watch the margin change in real time until you find the right balance.

Approach 2: Set a target margin, calculate the price

Enter the gross margin percentage you want to achieve. CrafterBy calculates the selling price required to hit that margin given your current total cost.

Selling Price = Total Cost / (1 - Target Margin)

Example: Total cost = €12.21, target margin = 40%.

• Selling Price = €12.21 / (1 - 0.40) = €12.21 / 0.60 = €20.35

Margin vs. markup: an important distinction

Many artisans confuse margin and markup. They are different calculations and produce different prices. Using the wrong one leads to systematic underpricing.

Gross Margin

Margin is calculated as a percentage of the selling price:

Margin = (Selling Price - Cost) / Selling Price × 100

Markup

Markup is calculated as a percentage of the cost:

Markup = (Selling Price - Cost) / Cost × 100

Why it matters

If your cost is €12.21 and you apply a 40% markup:

• Selling price = €12.21 × 1.40 = €17.09
• But your actual margin at €17.09 is: (€17.09 - €12.21) / €17.09 = 28.5%

You thought you were making 40%; you are actually making 28.5%. That is a significant difference, especially at volume.

CrafterBy works in margin throughout. If a buyer or platform quotes margins, they almost certainly mean margin too. When a business says "we require a 50% margin," they mean the selling price must be twice the cost, not 1.5 times.

Suggested price benchmarking

After setting a price based on cost and target margin, it is good practice to compare it to what the market actually charges for comparable products. If your cost-based price is significantly higher than market prices, you need to either reduce costs (process improvements, better material sourcing) or accept a lower margin on that product. If it is lower, you may be leaving money on the table.

CrafterBy does not pull market data — that research is yours to do — but it gives you an accurate cost baseline to negotiate from.