For a long time, I thought I had already figured out which product was carrying my small artisan business.
It was the product customers asked about most often, the one that appeared regularly in my WhatsApp conversations, the one people recommended to their friends and the one I seemed to be producing almost every week. Whenever somebody asked me which of my handmade products sold the most, I could answer immediately.
I knew the product was popular.
What I did not know was whether it was actually profitable.
That distinction became important after I sat down one weekend and calculated the real cost of producing my best-selling item. Until then, I had been judging the product by the number of orders I received and the amount of money coming into the business. I was looking at sales, not profit.
Once I started calculating everything properly, I discovered something that genuinely surprised me.
My most popular product was not my most profitable product.
In fact, when I included the things I had previously ignored, the difference was much bigger than I expected.
The experience forced me to rethink the way I looked at sales in my artisan business, especially in a place like Lagos where transportation, material prices, electricity, packaging, customer negotiations and delivery arrangements can all affect what is left after a sale.
Why I Thought My Best-Seller Was My Best Product
The product had almost everything I wanted from an item in my business.
Customers understood it easily. It did not require a long explanation before somebody could decide whether they wanted it. I could display pictures of completed pieces on WhatsApp and Instagram, and people would ask about the price almost immediately.
It was also the product that generated the most enquiries.
When I checked my WhatsApp chats, I could see conversations about it from different types of customers. Some were referred by existing customers. Others had seen a picture on social media. Some had walked into the shop and noticed it.
Because of that constant demand, I naturally assumed that it was the product making me the most money.
My thinking was simple: if I sell more units of something, I should make more money from it.
That sounds logical, but it leaves out an important part of the calculation.
Selling more units does not automatically mean earning more profit.
If a product requires more materials, more labour, more electricity, more packaging, more transportation and more time to produce, its profit per unit can be much smaller than it appears.
I had never properly calculated those costs.
The Number on My Price Tag Was Not My Real Profit
Before doing the calculation, I used a very simple method.
I would estimate how much the materials cost, add something for my time and then decide on a selling price that I thought customers would accept.
If the materials cost around ₦3,500 and I sold the finished product for ₦7,000, I would look at the difference and think I had made roughly ₦3,500.
That was not actually my profit.
There were other costs attached to producing and selling the item.
I needed packaging. I sometimes needed transportation to purchase materials. Some customers wanted delivery. Electricity was involved in production. There were occasional mistakes and pieces of material that could not be used. I also spent time communicating with customers, confirming orders and preparing finished products.
None of those costs appeared on the product itself.
That made the product look more profitable than it really was.
Once I understood this, I decided to calculate the cost from beginning to end.
I Started With the Materials
The first thing I did was calculate the materials used for one average piece.
This was more complicated than I expected because prices were not always consistent.
One month, I could buy a particular material at one price and discover that the same material was more expensive the following month. Depending on where I purchased it, the price could also vary.
This is something many Nigerian artisans already understand.
You can visit one market expecting to buy something at the price you paid last month and discover that the situation has changed completely.
For my calculation, I used an average purchase price rather than the cheapest price I had ever paid.
I did this because using an unusually cheap purchase price would make the product appear more profitable than it normally was.
After adding the main materials, smaller items such as thread, fasteners, labels and other consumables, I arrived at a much more realistic material cost.
The number was already higher than my original estimate.
That was the first warning sign.
Then I Calculated My Time
The next part was more uncomfortable.
I had never properly valued my own time.
Like many people running small businesses, I was used to doing whatever needed to be done. If a product took several hours to complete, I simply considered that part of running the business.
But time has economic value.
If I spend five hours making one product, those five hours cannot be spent making another product, attending to customers, buying materials, creating content or working on another order.
So I started recording the actual production time.
I did not just count the time spent physically making the item. I also considered preparation, finishing and packaging.
The result changed the calculation considerably.
A product that looked attractive based on material cost alone became less attractive once I included labour.
This was particularly important because my best-selling product was relatively time-consuming compared with some of my other products.
I was essentially selling a lot of my time without realising how cheaply I was selling it.
Lagos Transportation Was Another Cost I Had Ignored
Transportation was another expense that had quietly entered the business.
I sometimes had to travel to buy materials. At other times, I needed to collect something from a supplier or send an item to another location.
In Lagos, transportation is not always a simple fixed expense.
The cost can depend on distance, traffic, time of day and the method of transportation.
There were days when a journey that should have been straightforward became much longer because of traffic. There were also times when I had to make an additional trip because a material I needed was unavailable from my first supplier.
I had never been assigning any of those transportation costs to individual products.
That meant my product costing was incomplete.
When I started spreading reasonable transportation expenses across the products I was producing, the difference became obvious.
The best-selling product required more trips to source some of its materials than another product that I sold less frequently.
That was something my sales records could not show me.
The WhatsApp Customer Who Always Asked for Delivery Made Me Think Differently
One customer interaction helped me understand another part of the problem.
I had several customers who preferred ordering through WhatsApp and having their products delivered instead of coming to collect them.
From the customer's perspective, this was completely reasonable.
They were busy. They did not want to deal with Lagos traffic. They could send a message, make payment and have the item delivered.
The problem was that I had started mentally treating the selling price as if it represented the entire transaction.
It did not.
When delivery was included in certain arrangements, the economics changed.
I began separating product revenue from delivery charges and making sure I understood who was actually paying for the dispatch.
This was particularly important when customers negotiated heavily.
A customer might say, "Please, add delivery inside the price," or ask for a small discount because they were buying more than one item.
Those requests are normal in business.
The problem occurs when the seller agrees without knowing the minimum price at which the order still makes sense.
Customer Bargaining Was Eating Into the Margin
Another thing I noticed was how much negotiation affected my best-selling product.
Because customers knew the product was popular, I received many enquiries.
That was good.
But popularity also created more opportunities for bargaining.
Some customers would ask whether I could reduce the price. Others would say they had seen a similar item elsewhere for less. Sometimes a customer would ask for a discount because they were ordering two or three pieces.
At first, I treated each discount as a small amount.
₦300 here.
₦500 there.
₦700 on another order.
Individually, none of these discounts looked dangerous.
But when I calculated them across dozens of orders, I realised that discounts were reducing my margin considerably.
The important lesson was not that I should stop negotiating.
It was that I needed to know exactly how much room I had before accepting a lower price.
Without knowing the real cost of the product, I was negotiating against myself.
I Compared It With a Product That Sold Less Frequently
After calculating the best-selling product, I decided to perform the same exercise on another product that sold less often.
This second product did not receive nearly as many enquiries.
If I judged the products purely by sales volume, I would have considered it less important.
But when I calculated the cost of making it, the situation looked completely different.
The second product required fewer materials, took less time to produce and was easier to package.
It also generated fewer customer questions and required less back-and-forth before an order was confirmed.
The result was interesting.
Even though I sold fewer units of the second product, the profit per unit was significantly better.
That was when I finally understood the difference between a best-selling product and a best-performing product.
They are not necessarily the same thing.
My First Real Product Comparison
I decided to put the two products side by side.
Here is the breakdown from my calculation:"
| Cost and Revenue | Best-Selling Product | Lower-Volume Product |
|---|---|---|
| Average selling price | ₦8,500 | ₦9,500 |
| Materials | ₦3,200 | ₦2,400 |
| Labour/time allocation | ₦1,800 | ₦900 |
| Packaging | ₦350 | ₦250 |
| Transport and sourcing allocation | ₦450 | ₦200 |
| Electricity and production overhead | ₦300 | ₦200 |
| Average discount | ₦400 | ₦150 |
| Estimated profit per unit | ₦2,000 | ₦5,400 |
The exact figures are not important by themselves.
What mattered was the pattern.
The product that customers bought more frequently was producing much less profit per unit.
The second product sold less often but gave me significantly more room after the major costs were considered.
That changed my entire view of the product range.
The Product Was Popular for a Good Reason
I did not conclude that my best-selling product was a bad product.
Quite the opposite.
It was popular because customers liked it.
That was valuable information.
The mistake would have been to look at the numbers and immediately stop producing it.
Instead, I asked a different question:
How can I make the popular product more profitable without destroying what customers like about it?
That became a much more useful business problem.
Perhaps I could reduce material wastage.
Perhaps I could purchase certain materials in larger quantities.
Perhaps I could improve the production process.
Perhaps I could adjust the packaging.
Perhaps I could reduce unnecessary discounts.
Perhaps I could slightly increase the price.
Perhaps I could create a premium version with additional features.
The answer did not have to be "stop selling it."
I Started Looking at Wastage
One of the first areas I investigated was material wastage.
Artisan businesses often work with materials that cannot always be used perfectly.
A piece may be cut incorrectly. A section may have a defect. Something may be damaged during production.
If the material is inexpensive, it is easy to ignore.
But repeated wastage adds up.
I started paying attention to how much material was purchased compared with how much actually went into finished products.
This helped me identify areas where my production process could be improved.
Sometimes the solution was as simple as planning cuts more carefully.
In other cases, I realised that a particular material was being purchased in a form that created too much leftover waste.
Those changes did not immediately transform the business, but they improved the economics of the product over time.
I Also Looked at My Suppliers
My original approach to buying materials was based heavily on convenience.
If my regular supplier had the material, I bought it.
That was easy.
But convenience is not always the same thing as efficiency.
I started comparing prices between suppliers and looking at the cost of buying in larger quantities.
I also considered consistency.
The cheapest supplier is not necessarily the best supplier if the quality changes frequently or if materials are regularly unavailable.
For an artisan, consistency matters because customers expect the finished product to maintain a certain standard.
So I was not simply looking for the lowest price.
I was looking for a reasonable combination of price, quality and reliability.
I Discovered That Pricing Too Low Can Create Its Own Problem
For a long time, I was afraid to increase the price of my popular product.
I worried that customers would complain.
I worried that competitors might be cheaper.
I worried that people would stop ordering.
But after doing the calculation, I realised that a product can be popular and still be underpriced.
If customers love something but the business owner is barely making money from it, high demand does not solve the problem.
It can actually make the problem worse.
Imagine selling 100 units of a product and making ₦2,000 profit per unit.
That produces ₦200,000 before other business considerations.
Now imagine improving the product's economics so that the actual profit becomes ₦3,000 per unit.
At the same sales volume, the difference becomes ₦100,000.
The goal is not always to sell more.
Sometimes the goal is to make the existing sales more sustainable.
I Tested a Small Price Increase
I eventually decided to test a modest price increase instead of making a dramatic change.
I did not announce that my prices were going up because I was struggling.
I simply updated the price and observed what happened.
Some customers still bought.
Some asked questions.
A few decided not to proceed.
But the number of serious customers did not collapse the way I had feared.
That taught me something important about pricing.
Customers do care about price, but price is not the only thing they consider.
They also consider quality, reliability, appearance, convenience and trust.
An artisan who consistently delivers good work has more pricing flexibility than an artisan who is competing only on being cheap.
I Began Looking at Profit Per Hour
One of the most useful calculations I added was profit per hour.
One product gives me ₦2,000 in profit but takes four hours to produce.
That is approximately ₦500 of profit per production hour.
Another product might give me ₦4,000 in profit but take only two hours.
That is approximately ₦2,000 per production hour.
Suddenly, the second product looks very different.
This calculation became especially useful when deciding which orders to prioritise during busy periods.
If my production capacity is limited, I cannot simply focus on whichever product receives the most orders.
I need to understand how much value each product generates from the time available.
That is a lesson I wish I had learned earlier.
I Changed the Way I Viewed My Best-Selling Product
After the analysis, I stopped calling it my "most profitable product."
I started calling it my "highest-demand product."
That sounds like a small change in language, but it helped me think more clearly.
Demand was not the problem.
The economics were the problem.
The product had an important role in my business because it attracted customers.
Some people who first contacted me about that product eventually purchased other products as well.
That meant I could not judge its value entirely from the profit of one unit.
A popular product can sometimes act as an entry point into a wider range of products.
The important thing is to understand that role.
What I Changed in My Business
After completing the calculations, I made several changes.
I became more careful with discounts and stopped agreeing to reductions automatically. I improved my material purchasing process and paid more attention to wastage. I also started including packaging, transportation and production overhead when calculating the cost of an item.
Most importantly, I stopped using sales volume as my main measure of success.
Every month, I now want to know which products generate the most revenue, which generate the highest profit per unit and which generate the best return on my production time.
Those are three different questions.
A product can rank first in one category and much lower in another.
What I Would Tell Another Lagos Artisan
If you are an artisan selling handmade products in Lagos, I think it is worth doing this exercise with your own products.
Do not start by asking which product sells the most.
Start by asking how much it actually costs you to produce one finished unit.
Include the materials, labour, packaging, electricity, transportation, wastage and other costs that genuinely belong to the production process.
Then compare that figure with your selling price.
After that, look at how much time the product takes.
A product that gives you ₦3,000 profit but requires six hours of work may not be as attractive as a product that gives you ₦2,500 profit in one hour.
The answer will be different for every artisan because every business has different materials, customers, production methods and pricing.
That is exactly why generic advice about "selling more" is not always enough.
Sometimes the smarter move is to understand the economics of what you are already selling.
The Difference Between Revenue and Profit Finally Became Real to Me
Before this exercise, revenue was the number I paid the most attention to.
If the business sold ₦800,000 worth of products in a month, I felt encouraged.
But revenue does not tell me what I get to keep.
A business can have impressive sales and still struggle financially if the cost of producing those sales is too high.
That became obvious when I compared my products.
My best-selling item was responsible for a large amount of my monthly revenue, but another product was contributing a much better margin.
The information helped me make better decisions about production, pricing and promotion.
Instead of simply promoting the product that already attracted the most attention, I started giving more attention to products that combined reasonable demand with healthier margins.
I Did Not Abandon the Best-Seller
This is probably worth emphasising.
I did not stop making the popular product.
It still had value.
Customers wanted it, and demand is something many businesses would be happy to have.
What changed was the way I managed it.
I became more careful about its costs.
I looked for ways to reduce waste.
I improved purchasing.
I became more disciplined about discounts.
I tested pricing.
I also looked for ways to introduce customers who bought the popular product to other items with better margins.
The objective was not to turn my best-selling product into something completely different.
It was to stop allowing high demand to hide low profitability.
The Question I Ask Before Adding a New Product
The experience also changed the way I evaluate new products.
Before introducing something new, I now ask more than whether I think customers will like it.
I want to know how much it will cost to produce, how long it will take, how easy it will be to package, how complicated delivery will be and how much customers are realistically willing to pay.
I also consider whether the product fits the existing business.
A product that requires completely different materials and equipment may not be worthwhile if it creates a lot of complexity for a small amount of profit.
This does not mean every product has to be immediately profitable.
Some products may be useful for attracting new customers or testing a new market.
But I want to understand the reason I am adding them.
My Biggest Lesson From the Numbers
The biggest lesson was simple.
The product that keeps you busy is not necessarily the product that makes you money.
That was difficult for me to accept because being busy feels like progress.
When orders are coming in, WhatsApp is full of messages and customers are asking when their products will be ready, it feels like the business is doing well.
Sometimes it is.
But a busy business can still have weak margins.
An artisan can spend an entire week producing orders and discover at the end of the month that very little money remains after expenses.
That is why I now look beyond sales volume.
I want to know what each product contributes after the costs are considered.
The Bottom Line
My best-selling handmade product taught me a lesson that I probably would not have learned if I had only looked at my sales records.
Popularity and profitability are two different things.
The product customers asked for most was not automatically the product that gave me the highest return on my time and money. Once I included materials, labour, packaging, transportation, electricity, wastage and discounts, the real picture was very different.
The good news was that I did not have to abandon the product.
I simply had to understand it better.
I could improve the production process, control unnecessary costs, review my pricing and become more disciplined about discounts. I could also use the popularity of that product to introduce customers to other items that produced better margins.
For me, the exercise changed one important habit.
I stopped asking only, "How many did I sell?"
Now I also ask, "How much did I actually make, and how much of my time did it consume?"
That question is particularly important for an artisan because your time is part of your inventory. You can buy more fabric, materials or packaging, but you cannot create another twenty-four hours in the day.
If one product is constantly keeping you busy but barely leaving anything behind, more orders may not be the solution.
Sometimes the solution is better pricing.
Sometimes it is reducing waste.
Sometimes it is changing the production process.
Sometimes it is finding a better supplier.
Sometimes it is encouraging customers toward products with healthier margins.
And sometimes, after doing the numbers honestly, you may decide that a product is simply not worth producing anymore.
The important thing is to make that decision based on actual numbers rather than assumptions.
I started this exercise because I wanted to understand why my business sometimes felt busier without feeling significantly more profitable.
The answer was sitting inside my product list.
I was measuring what customers bought.
I was not measuring what those sales were really worth.
Once I started doing both, I began looking at my business very differently.