How do I price my handmade products without undercharging?

The classic formula is: Materials + Time (at a fair hourly rate) + Overhead + Profit margin = Price. The part most sellers get wrong is time. If you pay yourself $15/hour and a piece takes 2 hours, that's $30 in labor — before materials, before Etsy's 6.5% transaction fee, before payment processing, before shipping supplies. A real pricing formula for Etsy: (Materials × 2) + (Hours × your hourly rate) = wholesale price. Wholesale × 2 = retail price. Most handmade sellers find their retail price is higher than they're comfortable with — that discomfort usually means you've been undercharging. Also: check competitors at the top of search for your keyword. If your price is much lower, it can actually signal lower quality to buyers. Raising your price sometimes increases sales.