Do you actually know what you make on every sale?

For a while I thought things were going well. Orders coming in, money landing in the account, repeat customers. It felt like the business was working. Then one afternoon I sat down and actually worked out what I was making on each item.

The materials. The time I spent making it. Etsy's transaction fee. The payment processing fee on top of that. The listing fee. Shipping supplies. A portion of the tools and the studio costs spread across everything I make. It added up differently than I expected.

Some items were fine. A few were essentially break-even. One or two I was actually losing money on once I counted my time honestly. I had been so focused on whether orders were coming in that I had stopped asking whether they were worth taking.

So I built a tool to track it properly. COGS Tracker is available on the web at cogs.bonnycreations.com. There is also an Android mobile beta running on Google Play if you want to try it on your phone. Android only for now.

The problem with just looking at your bank account

Revenue feels good. Money arriving feels like success. But revenue and profit are completely different numbers and most small makers track the first one while mostly ignoring the second.

The fees are the thing that surprises people most. Etsy's transaction fee is 6.5% of the total sale price including shipping. Then there is a payment processing fee of 3% plus 25 cents per transaction. Then listing fees. If you run Etsy Ads, that comes out too. By the time you add it all up you can be looking at 12 to 15 percent of your sale price gone before you have bought a single piece of material.

And that is before labor. A lot of makers do not count their own time at all, which is understandable when you are starting out, but it means you do not actually know what you are earning per hour. If a $25 item takes you 90 minutes to make and ship and the fees eat $3.50 and the materials cost $4, you have made $17.50 for an hour and a half of work. That is less than minimum wage in most places.

What true COGS actually includes

COGS stands for cost of goods sold. It is the real cost of producing one unit of something you sell. For a maker business it breaks down into a few categories that are easy to miss if you are tracking things loosely.

Materials is the obvious one. But the number that actually matters is not what you paid for the sheet of wood or the bottle of resin. It is what that specific product used, including waste. If you are cutting shapes from a sheet and 30% of it ends up as offcuts, that waste has a cost. It came out of the sheet you bought and you are not selling it. If you do not account for it your material cost is wrong.

Labor is the one most makers undercount or skip entirely. Set a rate for your time. Even if you enjoy making things, especially if you enjoy it, your time has value. If you make something in 45 minutes, charge 45 minutes at your rate. The rate you pick can be adjusted but $0 is definitely wrong.

Shipping and packaging. The box, the tissue, the tape, the label, the padding. These add up across a year of orders in a way that is easy to miss when you are paying for them a few cents at a time.

Overhead. Studio rent, electricity, tool maintenance, subscriptions. These are real costs even if they do not attach neatly to a single sale. A useful approach is to divide your monthly overhead by how many units you expect to sell that month and add that amount to every product's cost. It will not be perfect but it is a lot better than pretending overhead does not exist.

Channel fees. Every platform takes a cut. Etsy's fees are layered and the total percentage is higher than most new sellers expect. A craft fair has a booth fee. Shopify has a monthly cost. Know what your channel costs and factor it into your pricing before you set it, not after.

The pricing mistake that is easy to make

The most common pricing mistake I see is working backwards from what competitors charge. You find a similar item on Etsy, see it is selling for $22, and price yours at $20 to be competitive. The problem is you have no idea what that other seller's costs are. Their studio might be their garage with no rent. Their materials might be bought in bulk at half the price you are paying. Their labor rate might be $0 because they have not counted it.

Pricing based on competition means you are racing to the bottom without knowing whether the bottom is profitable. Price based on your actual costs and your target margin instead. If the market will not support a price that covers your costs and gives you a reasonable return, that is important information. It means you need to reduce costs, improve efficiency, or focus on different products.

What I built to fix this

I started tracking costs in a spreadsheet. It worked for a while and then it became its own job. Updating material prices when I restocked. Keeping track of which product version used which labor rate. Calculating Etsy's layered fees correctly. Remembering to update things when costs changed.

I am a programmer. I should have built a tool from the start.

COGS Tracker is what I built instead. You add your materials once with their costs and units. You build products from those materials, set labor time per unit, and add shipping costs. You set up your sales channels once with their fee structure. When you log a sale, it calculates your real profit automatically: revenue minus every cost.

The dashboard shows your margin percentage, total profit for the period, and which products are pulling their weight and which are not. If a product is falling below your target margin it flags it. If a material is running low it surfaces that too.

The pricer shows you three suggested prices for any product: the minimum that covers your costs, the target that hits your margin goal, and a premium tier. Those are not guesses. They are calculated from your actual costs and your actual channel fees.

You can import your Etsy orders CSV directly so you are not entering every sale by hand. And if you sell on multiple channels, Etsy, craft fairs, your own site, you can track them all in the same place and see which channel actually makes you more money after fees.

Two ways to try it

The web version is live at cogs.bonnycreations.com. Sign in with Google, no credit card needed. The free plan covers 10 products and 10 sales per month, which is enough to get a real picture of your numbers. Pro is $7 a month or $60 a year if you need more.

There is also an Android app in closed beta on Google Play. Android only for now. If you want to track sales from your phone at a craft fair or log a restock while you are at the supplier, that is the version to try. You need to join the beta before you can install it, which just takes a Google account and the link below.

If you have ever looked at your sales and thought the numbers should feel better than they do, either version is worth 20 minutes. At minimum you will know your actual margin on your top three products. That alone changes how you think about pricing.