How to Price Products for Online Sales

Product pricing should include more than the supplier cost. Many new sellers set prices by adding a small margin to wholesale cost and later discover they lose money on every order.

Costs to include

• Supplier cost.
• Packaging.
• Shipping or courier charges.
• Payment and platform fees.
• Marketing and ad costs per order.
• Taxes.
• Expected returns and failed COD deliveries.
• Customer support time.

Calculate profit per order

Calculate contribution profit for each order instead of comparing only the selling price with wholesale cost. This shows whether each sale really adds money.

Test carefully

Test price points carefully and avoid discounts that make each sale unprofitable.

Commissions for resellers

If you sell through affiliates or resellers, define the commission structure before launch so your price can carry it.

Review regularly

Review actual order data regularly, because delivery charges, refunds and ad costs can change your margin.

Frequently asked questions

What profit margin should I aim for?

It varies by product, but your margin must cover all costs including returns and marketing, with room for profit.

Should I always be the cheapest seller?

No. Competing only on price lowers profit. Compete on quality, service and trust.