Start With the Real Cost Per Unit
Before you set a selling price, work out what one finished item really costs you to make. That means every screw, every metre of cord, every coat of finish, plus the time you spend cutting, sanding, assembling and packing. If you only count the visible material cost, you will usually undercharge and the margins disappear fast.
Begin with a single product and write down the cost of each component. If you buy materials in bulk, divide the total by the number of units you can make. For example, a 12 mm pine board bought in a full pack should be costed per piece not as one big purchase. Do the same for fasteners, adhesives, labels and packaging. In Johannesburg, transport and collection costs can also change your real unit cost, especially if you are moving stock between Braamfontein, Midrand or Pretoria East. Keep those small costs in the calculation.
- List every material used in one unit
- Divide bulk purchases into per-unit amounts
- Include packaging, labels and transport
- Check the cost again if the supplier changes prices
Count Labour Properly, Even If It Is Your Own Time
Many makers forget to pay themselves on paper. That is a mistake. If a product takes 45 minutes to cut, assemble and finish, that time has value. Decide on an hourly labour rate that is realistic for your skill level and the market you serve. Then add labour to the cost of each unit. If you use helpers or contractors, use their actual rate and include any setup or supervision time too.
For example, if your labour rate is R120 per hour and a product takes 30 minutes to make, your labour cost is R60. If the same item needs another 15 minutes for quality checking and packing, add another R30. That simple step can change a product from profitable to loss-making very quickly. It is worth being honest here, even if the numbers feel awkward at first.
In shared workshops or makerspaces, factor in the time lost to machine queues, tool changeovers and cleaning up after use. Load-shedding can also affect your timing, especially when you rely on sanding, drilling or charging equipment. A product that should take one hour may take longer on a mixed-power day, so build a little extra space into the figure.
- Set a fair hourly labour rate
- Include prep, making, finishing and packing
- Add help, supervision and checking time
- Allow for delays caused by machine access or load-shedding
Add Waste, Breakages and the Cost of Mistakes
No workshop gets perfect yield every time. Offcuts, warped boards, cracked acrylic, paint overspray and mis-cuts all affect the real price of a product. If you ignore waste, you are paying for it later out of your profit. A practical way to handle this is to add a waste factor of 5% to 15% depending on the material and the process.
For simple products with little cutting waste, 5% may be enough. For items with many small parts, curved cuts or fragile finishes, go higher. If you work with timber in humid coastal areas like Durban or Gqeberha, allow for swelling, sanding losses and occasional rejects. In Gauteng, dry conditions may be kinder to timber but dust and handling still create waste. The point is not to be exact to the cent, it is to avoid pretending waste does not exist.
You should also include a small allowance for damage during storage or transport. A box of finished items stored in a crowded room or loaded into a bakkie can take knocks. It is better to spread that cost across all units than to treat each loss as a surprise.
- Use a waste factor that suits the material and process
- Allow for offcuts, defects and rework
- Include storage and transport damage
- Review waste after each production run
Build in Simple Overheads Without Overthinking It
Overheads are the costs that keep the business running, even when no product is being made. Think of rent, electricity, machine servicing, consumables, internet, safety signage, cleaning and admin time. You do not need a complicated accounting system to start. You just need a fair method for spreading those costs across the products you sell.
A simple approach is to calculate your monthly overheads and divide them by the number of units you expect to sell. If your monthly overheads are R6 000 and you expect to sell 200 units, that adds R30 to each unit. If sales volume changes, the overhead per unit changes too. That is why pricing needs regular checking, not once-off guessing.
If you operate in a school lab, community workshop or training venue, include safety signage, maintenance checks and consumables planning in your overheads. These are not extras. They are part of keeping the workspace safe and usable for members, learners and facilitators.
- List monthly business costs that are not tied to one product
- Divide overheads by expected monthly unit sales
- Include maintenance, admin and safety items
- Revisit the number when sales levels shift
Use a Pricing Formula That Leaves Room to Grow
Once you have materials, labour, waste and overheads, you can set a base cost for the product. From there, add your profit margin. A common simple formula is: total cost per unit plus profit. If a product costs R180 to make and you want a 40% margin on selling price, calculate carefully so the final price still leaves room after discounts or commissions.
Do not price only on emotion or what you think people will pay. Start with your cost, then look at the market, your quality and the purpose of the item. Starter kits, teaching tools and event maker stations may each need different margins because the buyer and the use case are different. A school kit bought in bulk is priced differently from a one-off custom item for a corporate team, even if the materials are similar.
It helps to test a few price points before you commit. If the price is too low, you will feel pressure with every order. If it is too high, you may need to improve the finish, packaging or instructions. Pricing should support your business, not punish it.
Keep a price sheet for each product and update it when supplier costs move. Even a small change in timber, fasteners or packaging can change your result. A quick review every month or two is usually enough for small production runs.
Check Your Numbers Before You Quote
Before you send out a quote or publish a price, run through a short checklist. This catches the common errors that make products look profitable on paper but weak in practice. It also helps if more than one person is involved in making the item or approving the price.
Ask yourself whether the price includes all the small things that get missed. That can be glue nozzles, masking tape, drill bits worn down by use, packaging, bank charges or the time spent answering customer questions. If the product needs assembly instructions or after-sales support, count that too. Those costs are real, even if they do not sit inside the box.
- Have all materials been counted per unit?
- Is labour included at a fair hourly rate?
- Have waste and breakages been allowed for?
- Are overheads spread across the product range?
- Will the selling price still work after discounts or fees?
- Can you repeat the price next month if input costs rise?
When your figures are clear, pricing becomes much less stressful. You can explain your numbers with confidence, whether you are selling in Braamfontein, Soweto, Sandton or further afield. That sort of clarity helps buyers trust you, and it helps you keep the business healthy.
