How to Price Products for Online Selling in Pakistan

Setting a price is part arithmetic and part judgement. The arithmetic tells you the lowest price you can afford. The judgement tells you how much more the customer will accept. Many new sellers skip the arithmetic, copy a competitor's price and only later find out they earn nothing on each order.

Step one: list every cost

Write down everything that comes out of the selling price for one order.

• The price you pay for the product, whether to a shop, a supplier or a wholesaler.
• Delivery charges that you pay.
• Any platform fee or payment handling fee.
• Packaging, if you pack yourself.
• Money spent on advertising for that order.
• An allowance for failed or returned orders.

Step two: decide the profit you need

Profit is what remains after all costs. Decide the smallest profit per order that makes the work worthwhile. A very small margin leaves no room for mistakes.

Step three: add it up

Selling price equals total cost plus the profit you want. Use the same numbers every time so you can compare products fairly. On Shipify, the shop's price, delivery charge and platform fee are shown before you order, and the profit calculator on the homepage lets you test prices. The worked method is in how to calculate your profit on a cash-on-delivery order.

Step four: check the market

Search for similar products in the places your customers look. If your price is far above others, ask what makes yours different: quality, packaging, warranty or speed. If it is far below, check that you have not missed a cost. Matching the lowest price is not a plan; competing only on price is a hard way to build a business.

Round sensibly

Customers respond to clean numbers. Round to a figure that feels natural, and make sure the rounding does not cut your profit below your minimum.

Remember the failed orders

With cash on delivery some parcels are refused. If you ignore that, your real profit is lower than your spreadsheet says. Add a small allowance and review it after you have some real results.

Review regularly

• When your cost changes, change your price or accept a lower profit knowingly.
• When a product sells easily, test a slightly higher price.
• When it does not sell, check the photos and text before cutting the price.

A worked example with example numbers

Say you want to sell a kitchen item. The shop's price is Rs 700, delivery costs you Rs 250, the platform fee is Rs 50, and you allow Rs 50 as a cushion for the occasional failed order. Your total cost per order is Rs 1,050.

1. Decide the minimum profit that makes the work worthwhile, for example Rs 250.
2. Add it to your cost: Rs 1,050 plus Rs 250 gives Rs 1,300.
3. Check the market. If similar items sell for around Rs 1,300 to Rs 1,500, a price of Rs 1,350 or Rs 1,400 is realistic.
4. Round to a friendly number, such as Rs 1,350, and confirm that your profit is still above your minimum.

If similar items sell far below Rs 1,300, your costs are higher than the market can bear. Either find the product from a cheaper source, choose another product or compete on something other than price, such as better packaging or a clearer description.

Pricing mistakes to avoid

• Copying a competitor's price without knowing their costs.
• Forgetting delivery or the platform fee.
• Setting a price so low that one failed order erases a week of profit.
• Changing prices constantly so customers lose trust.
• Counting advertising spend as profit by mistake.

What to do when your costs change

Shops change prices, delivery charges change and platform fees can be updated. When one of your costs moves, redo the calculation for that product the same day. You then have three honest choices: raise your price, accept a lower profit on purpose, or stop selling that product. What you should avoid is carrying on at the old price without noticing that your profit has quietly disappeared.

Test a price, do not guess

If you are unsure between two prices, offer each to a similar audience for a few days and compare confirmed orders and profit, not just messages. A slightly higher price with the same number of orders is better than a lower price that earns the same total.

Common questions