Labor is your hourly wage. You do a lot on top of designing your items, so be sure to factor in your diverse talents as you consider your hourly wage. For example, think about the time you spend not just on production (making the item), but also on photography, marketing, shipping and other tasks. When Etsy lingerie shop owner Sophie Hines thinks about pricing, she asks herself, “If I were doing this full time, would I be able to support myself?”
Also, remember that labor costs are separate from profits. Imagine you hired an employee to make an item for you. If you don't add profit into your pricing equation, you'd be left with nothing after paying your employee. Profit is money that you can invest into the future of the business. We'll talk more about profit in a second.