Pricing guide
Common Product Pricing Mistakes
The quiet pricing errors that turn popular products into weak businesses.
Building price from incomplete cost
Pricing from supplier cost ignores freight, duties, packaging, fulfillment, payment fees and expected returns. Start with landed cost and then add the channel-specific expenses that occur when the product sells.
Using markup as margin
A 50% markup on a $20 product creates a $30 price and only a 33.33% gross margin. Write the formula beside each pricing target so buyers, operators and finance teams do not use the same percentage to mean different things.
Copying competitors without context
A competitor may have better purchasing terms, lower acquisition cost, a different bundle or a deliberate loss leader. Use market prices as evidence of customer expectations, not proof that the same price supports your economics.
Forgetting the next decision
A price must leave enough contribution for advertising, overhead, returns and reinvestment. Recalculate after fee changes and promotions, and keep a minimum viable price for each channel instead of relying on one store-wide margin target.
Test the numbers
Use your own current costs and keep a dated note for every marketplace fee, carrier rule or operating assumption that may change.