Most underpriced products are not a maths problem. They are a missing cost line. Here is how to build a price you can defend and repeat.
How to price products online is usually framed as a competition question: what will the customer pay? The better first question is what the product costs you to deliver, including the parts that never appear on the supplier invoice. Packaging, delivery you absorb, payment fees, returns and your own time all belong in the number.
Start with landed cost
| Cost line | Example | Easy to forget? |
|---|---|---|
| Product cost | Supplier price per unit | No |
| Inbound shipping or freight | Share per unit | Often |
| Packaging | Box, tape, insert card | Often |
| Delivery subsidy | Amount you absorb per order | Yes |
| Payment or platform fee | Percentage of the sale | Yes |
| Returns and breakage | A small percentage per unit | Almost always |
| Your time | Packing, answering, dispatching | Yes |
Add the lines that apply and you have a landed cost. If that number already exceeds your current price, no amount of marketing fixes the product — the price has to change or the cost does.
Choose a margin, then convert it to a price
Work backwards from the margin you want to keep. If landed cost is 40 and you want a 60% margin, the price is 40 ÷ (1 − 0.60) = 100. If you instead add 60% to cost, you get 64, which is only a 37.5% margin. The second method feels safer and quietly undercharges you.
- Cost-plus markup is simple and fine for commodity resale.
- Target margin is better when delivery and fees take a share of every sale.
- Value pricing works when the product saves time or solves a specific problem.
- Anchor pricing uses a bundle or a premium tier to make the core offer look reasonable.
Price delivery as a separate decision
Three models work for small shops: charge actual delivery, charge a flat zone rate, or absorb delivery above a minimum order. The third is the most dangerous because it can turn a small order into a loss. If you use it, set the threshold from your average order value, not from a round number you like.
| Model | Best when | Risk |
|---|---|---|
| Actual cost | Heavy or bulky items | Buyers abandon at checkout |
| Flat zone rate | Local delivery with predictable routes | Long-distance orders lose money |
| Free above a threshold | You want larger baskets | Small add-on orders erode margin |
| Pickup | Local customers | Limited reach |
Use round numbers with a reason
Charm pricing — 99 instead of 100 — is a real convention in retail, but it matters less in a WhatsApp chat than clarity. What matters more is a price that is easy to say, add and transfer. A catalogue full of 1,847.36 makes the buyer do arithmetic and the seller explain tax. Round to a clean number that already includes your costs.
Discount with a rule, not a mood
- Discount bundles, not your bestseller, when you want higher order value.
- Set a maximum discount you will not cross, and put an end date on every promotion.
- Never discount immediately after a price increase; it teaches customers to wait.
- Use a coupon code on the catalogue so the discount is tracked, not improvised in chat.
Keep one price across every channel
The catalogue, Instagram bio, WhatsApp status and the shop counter should agree. A customer who sees three prices learns to negotiate rather than buy. When a price changes, update the catalogue first, then the social posts, then the saved replies — in that order, on the same day.
When to raise a price
Raise when costs rise, when you are consistently sold out, or when the product takes more time than the margin pays for. Tell repeat customers before the change, keep the old price for orders already confirmed, and update the catalogue once rather than editing individual chats.
Once the price is set, make the product page earn it: how to write product descriptions and product photos with a phone. Then create your catalogue and publish prices you can defend.
Frequently asked questions
Markup is added on top of cost, while margin is the share of the selling price you keep. A 50% markup on a $10 cost gives a $15 price, which is a 33% margin. Confusing the two is why many shops think they are profitable when they are not.
Written by MyShp Editorial Team
We write practical guides for independent sellers, home businesses, and small shops taking orders on WhatsApp.