How to set your price so you make profit
Count every cost, pay yourself, then add profit. A simple way to set your price, with an example in naira.
Many sellers set their price by checking what the next shop charges. Then they go a little lower.
It feels safe. But if you don't know what each sale really costs you, you can sell all day and still lose money.
Here is a simple way to set your price.
Step 1: Count every cost
Don't stop at what you paid the supplier. Add everything it takes to get the item to your customer:
- what you paid for the item
- transport and delivery
- packaging (nylon, box, stickers)
- data, airtime and ads
Most sellers only count the first one. The rest is where your profit goes missing.
Step 2: Pay yourself
Your time has value. Add a fixed amount for yourself on every item you sell.
If you don't, the business is using your money without telling you.
Step 3: Add profit
Profit is not your pay. Profit is money for the business. It helps you buy more stock, try new things, and survive a slow month.
Add it on purpose. Don't leave it to chance.
Example
Say you buy an item for ₦3,000. Here is how a ₦5,000 price breaks down:
- Item: ₦3,000
- Transport, packaging, data and ads: ₦700
- Your pay: ₦500
- Profit: ₦800
Your price: ₦5,000.
Now, if the shop next door sells the same item for ₦4,200, don't panic. You know your numbers, so you can decide calmly.
If you can't say where every naira in your price goes, you are guessing.
Your task for this week
- Pick your 3 best-selling items.
- Count the full cost of each one.
- Check if your price covers it.
Many sellers find at least one item they have been selling at a loss. That's okay. Now you know what to fix first.