How to price your products without losing money

Many businesses lose money without realizing it because they price "by eye" or by copying the competition. The right price is not the lowest one: it is the one that covers your costs, leaves you profit and the customer sees as fair. Here is how to calculate it step by step.

1. Know your real cost

A product's cost is not just what you paid for it. It also includes hidden costs: packaging, shipping, payment fees and the time you invest. If you do not add them up, your margin is an illusion.

• Purchase or production cost of the product.
• Packaging and shipping material.
• Payment gateway or transfer fees.
• A share of your fixed costs (internet, transport, advertising).

2. Set your profit margin

The margin is the percentage you earn over cost. A practical starting rule is a 30%–50% margin, though it depends on your sector: fashion usually supports higher margins than food. What matters is that the final price covers cost + margin, not just cost.

3. Compare, but do not copy

Look at competitors' prices as a reference, not a rule. If you sell much cheaper, customers may doubt your quality and you earn less. If your product has something better (service, fast shipping, warranty), you can charge a bit more and communicate it.

4. Review your prices periodically

Costs rise over time. Review your prices at least every three months and whenever the cost of your supplies changes. A business that never adjusts prices ends up working to pay costs, not to earn.