A handmade item: pay for your time first
A $40 item plus $5 shipping, with $10 materials, $10 labor, $1 packaging, and $5 postage, leaves $14.27 profit after estimated Etsy fees.
The labor allowance covers 30 minutes at $20 an hour. Leaving it out would overstate profit by $10.
Read the handmade exampleTry these numbers in the calculator