As a fellow crocheter, I can say that the ideas of using a price for profit formula was terrifying. I had a few instances of "OMG no one will pay THAT". But, as you said, you can't make enough profit if you aren't calculating in your time. That being said, I can share my a little of my own experience and hope it will help!
I began working with a woman who owns a local pet boutique (non-chain) after she saw a picture of an item I created for my dogs. I agreed to supply her at a wholesale cost with them at $10 a pig, a price I pulled out of the air. This toy used 1 ball of cotton ($2), a good bit of polyfill (about $.25), and two squeakers ($.75). There is $3 in supplies. The actual time to make one is about 2 hours (from crocheting to stuffing and complete assembly), which means I was making about $3.50/hr after my supply cost. The good news is they sell great! The bad news is I was busting my tail on this one item for her shop and making squat because I had no real basis for what I gauged my price on. After learning more about pricing for profit, I met with her and told her that while I was grateful for the opportunity she was giving me, it wasn't really a financial gain for me. When I introduced some brand new items that I actually followed a formula that included a $10 hourly wage+cost of supply+15% markup for profit. The pigs came out to $18 wholesale using this formula, and when I introduced that price to her she was pretty quiet. So we went through the rest of the items, and she agreed to EVERY. SINGLE. PRICE. When we revisited the pigs I made a personal decision to meet her halfway because of the popularity and how well they did there. Also because now that I had an expanded inventory and was making what I wanted plus 15% on EVERYTHING else, I felt good about it.
The best advice I can offer, is to follow a formula based on an hourly wage+materials+profit markup and see where it lands you. Sometimes it is shocking, other times it looks low, but the great thing is that it is just an IDEA of where you could go with it and you can adjust up or down from there. There is a lot to be said for perceived value. Just remember that even with an art as time consuming as crochet, our time is NO LESS VALUABLE than someone who may take less time to create an item. It really comes down to where you wish to be. If you are really comfortable with where you are, then there isn't anything wrong with it. But, if you are anything like me, you are asking us about your pricing because you know you deserve more but are afraid of losing clients if you raise prices. The thing is, you may lose clients. You may get comments that say your prices are too high. BUT you may also bring in a new group of clients, people who aren't looking for a steal and are respectful of the fact that as a handmade business owner, you are in fact, an artist. Those people are the ones who make the risk worth it.
Sorry it's long winded but I hope it helps! Here is a link to the "Pricing for Profit" video that helped me :-)
https://www.etsy.com/blog/en/2012/etsy-success-the-art-of-pricing-for-profit-workshop/
