Pricing for Profit: How to Pay Yourself and Increase Margins

Pricing for profit: How to pay yourself and increase margins in your product business.

If you run a product business and aren’t consistently paying yourself properly, something needs to change.

Too many creative business owners underpay themselves, underestimate their time, and operate on margins that barely cover materials. Let alone profit.

This is how businesses turn into expensive hobbies.

If you want a profitable, sustainable product business, you must start by paying for your time and improving your profit margins.

Let’s break down exactly how to do that.

Step 1: Pay Yourself for Your Time (Properly)

Your time is not free.

Every part of your product process has a cost:

• Designing
• Sourcing materials
• Making or manufacturing
• Packaging
• Admin
• Marketing
• Customer service
• Post office runs

If you’re not charging for all of it, you’re absorbing that cost yourself.

Decide Your Hourly Rate

Start by asking:

• What hourly rate feels fair and sustainable for me?
• Not what feels comfortable or safe.
  What reflects your skill, experience and the fact that this is a business?

Once you decide your hourly rate:

• Time yourself on every part of your process
• Add up the total hours per product
• Multiply by your hourly rate
• Add this to your material costs

This is your real cost of production.

Step 2: Know Your Capacity

You also need to understand:

• How many products can I realistically produce per month?
• How many projects can I take on?
• How many hours do I actually want to work?

This helps you set realistic sales targets.

If you know:

• Monthly expenses
• Your personal salary goal
• Your production capacity

You can reverse engineer exactly how much you need to sell.

Without knowing your numbers, you’re guessing. With your numbers, you’re strategic.

Step 3: Plan for Growth Now

Even if you make everything yourself right now, ask:

• What happens when I outsource?

If you eventually want help with:

• Manufacturing
• Packing
• Admin
• Marketing

You need to build healthy margins now so you can afford to grow. As pricing too low today limits your options tomorrow.

How to Improve Your Profit Margins

If you’re thinking:

“I can’t charge any more.”

Then you need to improve your margin in other ways. Try these alternatives:

Reduce Costs

• Buy materials in larger quantities
• Negotiate with suppliers
• Review alternative suppliers
• Reassess packaging costs

Reduce Time Per Product

• Batch make where possible
• Streamline processes
• Simplify designs
• Remove unnecessary elements

If you cut 10 minutes per product and make 100 units, that’s over 16 hours saved.

Rethink Your Design or Materials

• Simplifying the product
• Using alternative materials
• Changing packaging
• Removing free delivery

Boost Your Pricing Mindset

Often, the real issue isn’t the numbers. It’s your belief. If you struggle to see the value in your work, you’ll underprice.

If you believe customers won’t pay more, you’ll stay stuck. But pricing confidently is part of building a sustainable business.

• You are not running a charity.
• You are not running a hobby.
• You’re building a business.

Profit Margins by Sales Platform

It’s not just your own website that matters.

Most product businesses sell across multiple platforms to future-proof income.

But each platform takes different fees and that affects your margin.

Here’s what you should aim for (minimum):

Own Website

• 60%+ (ideally 70–80% if you want to wholesale)
• Your website should be your most profitable channel.

Etsy

• 50–60%+

notonthehighstreet.com or Holly&Co

• 30–50%+

Wholesale

• 30–50%+

Remember: Profit Is Not Greed

Profit allows you to:

• Pay yourself (and your family) properly
• Grow your business
• Invest in support
• Avoid burnout
• Plan long-term

If you are constantly scraping by, you’ll resent your business. And that’s not why you started. It’s probably why you left that PAYE job…

Ready to Build a Profitable Product Business?

If you’re unsure whether your margins are strong enough, or you know something needs to change. I can help.

Inside The Profitable Product Plan, my 1:1 retail mentoring programme, we:

• Review your pricing and margins
• Analyse your sales platforms
• Set clear sales targets
• Strengthen your profit strategy
• Build a sustainable plan that actually pays you

This isn’t about working harder. It’s about building a product business that works for you.

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