How to Price Your Laser Cut Products for Profit
Pricing your laser-cut products correctly is crucial for running a profitable business. Many makers undervalue their work, leading to burnout and low profits. This guide will help you set the right price so you can confidently grow your business while making a sustainable income.
1. Understanding Your Costs
To price your products properly, you need to calculate all expenses involved in production. Here’s what to consider:
Material Costs – Include wood, acrylic, leather, or any other materials used.
Laser Machine Wear & Maintenance – Factor in the cost of repairs, maintenance, electricity, and depreciation.
Labor Costs – Even if you're a solo entrepreneur, your time has value. Set an hourly wage for yourself.
Other Expenses – Packaging, shipping, software subscriptions, marketing, and transaction fees should all be included.
Pro Tip: Keep a spreadsheet or use accounting software to track your costs per project. Knowing your actual expenses makes it easier to price accurately.
2. Pricing Formula for Profitability
A simple pricing formula to ensure profitability is:
(Material Cost + Labor Cost + Overhead) × Markup = Retail Price
Typical markup costs range from about 2-3x (Many businesses actually go up to 4-6x), I will use a 2.5x for the following examples.
For example, if a product costs $5 in materials, $10 in labor, and $5 in overhead, and you apply a 2.5x markup, the final price would be:
$ (5 + 10 + 5) × 2.5 = $50 retail price
This ensures that you're covering costs while making a profit.
Markup Tips:
Use a higher markup for niche or custom designs
Adjust markup based on the complexity and uniqueness of the item
Beyond Discounts: Why Value Matters More
Rather than competing on discounts, focus on the value and transformation your products bring. Customers aren’t just buying wood and paint—they’re buying:
The joy of gifting something meaningful
The beauty of home décor that lasts
The story behind a personalized keepsake
Cheap pricing may win you a sale today, but it won’t sustain your business tomorrow. Pricing with confidence ensures you’re building something that lasts.
3. Real-World Pricing Examples
Let’s say you’re selling custom engraved tumblers:
Material Cost: $20
Time & Labor: $10
Overhead Costs: $5
Markup: 2.5x
Final Price: $ (20 + 10 + 5) × 2.5 = $87.50
Or a layered nursery sign:
Materials: $12
Labor: $20 (design, assembly, painting)
Overhead: $5
Price: $ (12 + 20 + 5) × 2.5 = $92.50
These examples give you a baseline but remember to customize pricing based on your brand, audience, complexity, and skill.
Don’t Forget Overhead Costs
Materials and time are only part of the picture. Hidden costs that eat into profit include:
Packaging & shipping supplies
Laser machine and maintenance
Air filters, ventilation, safety gear
Power and electricity
Computers, design software, subscriptions
Workspace (home studio or rented)
💡 Plan Ahead for Repairs: Your laser isn’t just a tool, it’s the heart of your business. Set aside a small monthly amount for replacement lenses, filters, or repairs. Think of it like an insurance policy for your business.
4. Adjusting for Market Trends
Competitive Analysis – Research similar products on Etsy and Shopify to stay competitive, but don’t undersell yourself.
Premium Pricing – Use high-quality materials, offer personalization, or create bundled products to increase value and therefore price.
Seasonal Pricing – Holiday-themed products often allow for higher pricing due to demand and urgency.
Think About Perceived Value: High-quality photos, detailed listings, and excellent customer service all allow you to price higher.
Common Pricing Mistakes to Avoid
When you’re just starting out, it’s easy to slip into habits that make your shop look busy but leave your wallet empty. Here are three of the most common traps:
Pricing Based Only on What Others Charge
It’s tempting to hop on Etsy, scroll through similar items, and copy what other sellers are charging. The problem? You don’t know their numbers. Maybe they bought materials wholesale in bulk, maybe they’re underpricing just to get sales, or maybe they’re losing money without realizing it.
Your business is unique. Your costs, your audience, your branding, and your time are different. Pricing based on someone else’s numbers is like trying to run a race in their shoes, it won’t fit you and it won’t last long.
Forgetting to Pay Yourself for Labor
So many makers calculate materials and maybe overhead, but leave out their own time, almost like their work doesn’t “count.” But your time matters. Every hour designing, sanding, painting, packing orders, answering messages, or standing at a market booth is time you could spend elsewhere.
If you don’t pay yourself in your prices, you’re not running a business, you’re running an expensive hobby. And over time, that leads to burnout. Build in a fair hourly rate so you can sustain your energy, your creativity, and your business.
Believing Cheaper = More Sales
This is probably the biggest myth. Undercutting your prices might get attention, but it also sends a message: “This is worth less.” When customers see higher prices, they often assume higher quality, more professionalism, and better service. When they see “too cheap,” they can wonder what’s wrong with it.
Cheap can actually cost you sales. Customers shopping for handmade goods want something meaningful, not the cheapest option. By pricing confidently, you attract buyers who value your craft, not just bargain hunters who will disappear when they find someone a dollar cheaper.
Final Encouragement: Charge What You’re Worth
You’re not just selling products, you’re creating value people are excited to pay for.
Charge in a way that respects your time and creativity
Attract customers who appreciate your craft
Build a business that can reinvest in growth
Start small, start messy, but start today. Your future self (and your future business) will thank you.
Let’s stay connected!
Follow me for more laser business tips, product trends, and free resources.
Pinterest – See what’s trending and pin your way to success!
Shop Products and Shop SVG – Browse my laser-cut designs and digital files.
Instagram – Behind-the-scenes and community support.
Website – Explore my other blogs, free guides, and courses.
The SVG Society – Access laser-ready designs that match your unique style and help your products stand out.
Turn your passion into profit and take the first bold step toward your dream laser business today!
Join Our Laser and Small Business Friends Email Newsletter!
Want more laser business tips, exclusive offers, and small business inspiration? Sign up for our Email Newsletter and get fresh insights delivered straight to your inbox!
