How to Calculate Manufacturing Costs for Handmade Products

I had a really good question from a viewer asking how does one calculate the cost to produce one of their bags. It's actually a lot simpler than you'd think! The trick is to make sure you break down your material costs as it relates to the individual bag.
Sample Spreadsheet Used in the Video: docs.google.com/spreadsheets/d/1cBGnk15Tlvz1gEQe1GyGnIqU2yRKiUtb/edit?usp=share_link&ouid=115913242178414289441&rtpof=true&sd=true
Nolvo World (for my d-rings and hooks): www.aliexpress.com/store/1100660061?spm=a2g0o.detail.1000007.1.39c64a08t5sfHF
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[@Zenos76onTwitch]

Fierce, as an accountant, I can say that that is the perfect way to calculate a sale price. Cost x 3 is the way I was taught to do it. 👍👍

[@RK-su4hs]

Cost x3 ( 300% costs)covers enough to sell wholesale to retail outlets & make sufficient profit?

[@barbaran9003]

So glad you have done this video. I am new to bag making and have been trying to figure out exactly how much to charge per bag and I have done exactly what you have done. Happy to see that you do the same. Thanks 😊

[@ritlua]

Ahhhh appreciate you diving into this!

[@jeanhawkins6260]

I Love learning from you so much! Your humor keeps me laughing and light hearted...thank you!

[@blw1502]

I am seriously so glad you’re starting to upload videos more frequently!! I absolutely enjoy watching all your videos!!! ❤

[@fiercekittenz]

Thanks! I'm trying my best! There are weeks where I don't need to do much on my lunch break and can get a video done for y'all, but the closer I get to the holidays, the more hectic it gets!

[@bernadettesteart8684]

This has helped me so much as I never knew how to work out how much to charge. This was awesome thank you!

[@priscillajones9978]

This was very helpful especially with excel. So enjoy watching your humorous to serious videos 😇

[@juliecangialosi7183]

Thank you for this, you are so talented and thoughtful

[@Upcycledbaglady]

So informative, as always.

[@PeggyH2830]

Thank you for your informative video it made my calculations much easier as a beginner . Appreciate your knowledge sharing .

[@evamore72]

Great advice & funny too! 😁 Thank you (no ads skipped!)

[@fiercekittenz]

Haha! Thanks. You can skip them though if you want :P Seriously, it's ok!!! I just take whatever I earn here and roll it back into the community or charity!

[@lauraneill5981]

I sooo appreciate your posts… Thank you

[@carolinerobert1370]

I am a newish small buisness that us dissabled and it is very hard for me to calculate appropriatly. This really cut it down in easy steps! Thank you so much!

[@fiercekittenz]

You're so welcome!!!

[@valechet]

Love the video. Thanks for sharing...for the lesson in a fun way. Usually I don´t leave comments, but had the feeling to do it this time.

[@ninibartolome5666]

Thank you for this!

[@StephanieMayfieldDIG]

Excellent video! I have issues keeping track of fabric costs so I generally average (ie all polar fleece is now this average price vs pattern A was this and pattern B was this and pattern C was on sale....). I also think I need to charge a mark up for specialized skills. Not many people know to properly make a mushing harness for instance.

[@bunnyman6321]

Thank you Professor Fierce Kittenz!

[@merralindagoddard9530]

I haven’t started selling bags because I enjoy gifting them but this video is informative. Thanks

[@eandm_creations]

Thank you! I've been doing this in a notebook 🤦‍♀️ but I only multiply by 40% which never truly covers my labor or handling.

[@lniebla]

I would love to see how you package your bags. The box looks cute too.

[@fiercekittenz]

Added this to the list of video ideas!!!

[@felinehermetica]

I also have dyscalculia! It sucks! I will measure 7 or 8 times before I’m confident enough to cut fabric. It helps to have an big, huge, actually, cutting mat and a ruler with a lip!

[@JuliettePepperell]

Thank you! Very helpful. Apologies if someone already asked... I LOVE the strap and zipper on your bag. You mention it in the video but I can't catch the name you said. Do you mind sharing where you got them?

[@fiercekittenz]

Alchemats!

[@craftingwithviovieux]

When you calculate your own pay, you always have to consider what if you had to hire a person to do this work for you , so you have to think about the hourly pay, payroll taxes and possibly paid vacation and sick days . Unless you want to keep your business yourself , but in any case , pay yourself a living wage of the area where you live. Talking from my experience when I had to hire people .

[@fiercekittenz]

Oh this is a REALLY good point to make!

[@cindyflora7945]

Where did you buy your custom fabric? Thank you for breaking down this topic!

[@fiercekittenz]

The fabric in this video was from Knitorious! I also use a lot of Wonderground.

[@brendaeves3236]

Sounds fair to me.😊

[@ChristineKrannich]

Where do you get fountain pen safe note cards? Are they custom? Fantastic video! Thanks for your generosity in sharing all the info you do in your videos!

[@fiercekittenz]

Ah they're not custom! I got them from JetPens.com!!!

[@eandm_creations]

JetPens is AMAZING!

[@SewFun]

Where do you factor in, if at all, costs of things like the thread, the electricity for running the machine, maintenance of said machine.? I'm not interested in nickel and diming something to death, but those costs are real costs as well and I'm curious if they are rolled into something.

[@fiercekittenz]

Good question and I kind of glossed over it when I talked about the rivets. I only care about thread costs when it comes to embroidery. I charge for embroidered products differently (something maybe I could have mentioned in the video). For those products, I will charge for the base item and then $1 per 1,000 stitches. It never made sense to me to roll in that cost to something like bags or wallets. It's works itself out, for me, when I just round up. E.g. we came out to $9.63 for the cost to make this bag, so I'll round up and that should cover one needle and the thread used - gentle reminder I buy in bulk, so my costs are lower.

[@eandm_creations]

I'm not a bulk buyer. I add 10% to my material cost to cover things like thread, needles, rivets, rotary blades, etc.

[@Bustahbrown]

😂 The rule of 3’s Is a very good Starting Point for low cost everyday consumer goods.

[@fiercekittenz]

Or if you know what you're doing and are experienced at producing your products.

[@ilaallen190]

This was so helpful. I order the majority of my fabric and there is shipping, which is out of control now. Would I divide the cost and add to the roll price? EX: total rolls (vinyl) 15, shipping $25. So that w/b $1.67 added to the cost of each roll, unless there is a better way. All suggestions welcomed. TIA

[@fiercekittenz]

I include shipping in the cost as it is getting a little out of hand, you're right.

[@Kimzworld1]

I do a lot of bargain shopping for fabric so when I figure costs I charge what it would be to replace that fabric unless I have a boat load of it because if it sells you will run out of fabric & people won't be happy when they see the price go up. Not that I sew to sell very much but if someone asks me to make something that is how I do it :)

[@suscos]

I like the cost of material x3 for labor

[@eandm_creations]

I began my pricing with materials times 40%. It has never felt like enough to cover my labor. But now I'm trying to figure out how to just raise my prices by nearly half 😬

[@dtmoffett]

I have dyscalculia also! And I work in healthcare procurement...the struggle, and sew. I mean who knew, math in highschool was horrible and my math anxiety is fierce. I do my costs calculations legit like 3 times and then still am sure I did something wrong! lol

[@fiercekittenz]

I dread it whenever I need to do math in a setting where I'm on the spot. Meetings, streaming on Twitch, or even recording a video I could TOTALLY EDIT later all make my anxiety peak! People think software engineers need to be strong in math. That's not true. We just need to be strong at solving problems - doesn't necessarily need to have numbers!

[@dtmoffett]

Same, I can totally think outside the box. But don't ask me math questions. lol the logic!!

[@erikakatuin2124]

Do you use the business version or the home version of excel?

[@fiercekittenz]

It's just the home version!

[@evawsee8327]

what abouz zje cost of tools? how do I calculate those? Like pliers, hammer for rivets etc. sewing needles, sewing machine???

[@RK-su4hs]

I’m almost ready to sell on Amazon Should I include the estimated Amazon fees (including storage fees) into the cost of the product? Btw not going to Ivy school to get a business agree is Not a drawback. Albert Einstein agrees :) Lastly your puckish humor is 👌😎. Keep it coming “Experience is the only real knowledge “ Albert Einstein “

[@fiercekittenz]

Oh absolutely include the fees! Those eat into your bottom line, which is why I warn about Etsy so much. Absolutely use Etsy or other platforms, but you have to consider all the fees when pricing.

[@RK-su4hs]

@@fiercekittenz thanks for the answer The struggle is real. Appreciate your willingness to share & help others

[@86bushy]

Sorry, I don’t understand why 1/3 of $1.5 for your zipper tape coming in at $1 instead of $.50. Is it just rounding up to the closest who number for the row?

[@baumannmark4039]

Hello I watched your video so many times, but still can't figure out how can I calculate. Because my materials are on meter/cm and in Euro not Dollars I would like to calculate my own bags, but I don't no how can I calculate. The math is very difficult for me. Please help me understand!! What means the B2*(1/8)??!!!

[@fiercekittenz]

Let's say you paid 18 euros for a meter. There are 4458 square centimeters to that meter of fabric (assuming 45" wide). Take the cost of the meter (18 euros) and divide it by the number of centimeters (4458) to get your per-cm cost: 0.00404 (rounded up). Lay out your pattern pieces as you would to cut and determine how many square centimeters you need for that fabric. You determine this by measuring the width and height of the area the pattern pieces take up, then multiply those together to get the square centimeters. Take that value and multiply it by the cost. So if I'm going to need 250 centimeters in total for the bag's exterior fabric, that will cost me 1 euro for the bag's exterior. Mind you I use US dollars and Imperial units, so I may have seriously mucked up the conversion HOWEVER the formula is correct LOL!!!

[@taylorfaber2610]

Did you forget interfacing cost? Just curious?

[@fiercekittenz]

GAH! I DID!!!

[@annikacox4531]

A follow up question for you. How do you go about scaling up to figure out how many units it would take to get your price down to say $5, from the $20 for one bag?

[@fiercekittenz]

Great question! That's more related to my latest video on bringing costs down!