Supplier price plus a margin isn't enough. The hidden costs of online selling, a simple pricing formula, and mistakes that make a store sell a lot and earn little.
Many stores sell well, then discover at month's end that profit is far below what they thought. Usually they counted the purchase price and margin and forgot costs that never appear on an invoice.
The hidden costs
- Packaging: boxes, bags, tape and the thank-you card.
- Delivery you cover or subsidise.
- Returns and orders refused on delivery.
- Advertising divided by the number of orders.
- Platform commission if any, and transfer fees.
- Your time: photos, replying to messages, preparing orders.
A simple pricing formula
For each product add up: purchase price + packaging + its share of delivery + its share of ads + a reserve for returns. That's your real cost. Add the margin you want and compare with market prices: if you're far above, look for a cost to cut, not a profit to give up.
A quick example
A perfume bought at 40, with 3 for packaging, 5 delivery share, 6 ad share and 2 returns reserve, really costs 56, not 40. Selling it at 60 earns 4, not 20.
Pricing tactics that lift profit
- Bundles: two products for slightly less than their sum raise order value.
- Sizes: a better unit price on the larger size encourages bigger purchases.
- A free-delivery threshold above the average order.
- Time-limited coupons instead of permanent discounts.
Why commission matters in pricing
A percentage on every order eats straight into your margin, and grows as your sales grow. A flat, no-commission subscription keeps the maths clear: you know your cost in advance however much you sell.
Selling a lot at a thin margin is a lot of work. Right pricing starts from real cost, not the competitor's price.