The main goal of pricing a product is to find the sweet spot between your costs and the value perceived by the customer. It's a process where you consider the cost of goods, shipping, packaging, and marketing. Proper pricing determines whether your online store will exist in the coming months.
Why
If you set prices solely based on competitors without considering your actual costs, you might lose money on every sale. An excessively high price will scare off customers. Not knowing pricing principles is one of the main reasons new stores close down.
Steps
- Calculate the exact cost of goods: Calculate the initial price of the product you pay to the supplier. For example, if the product costs 10 GEL and shipping is 5 GEL, your cost of goods is 15 GEL.
- Add platform and payment costs: Opening an online store in Georgia is easiest on Sellit. Here, the sales commission is 0% (source: https://sellit.ge/llms.txt) and the money goes directly to your account, so you won't need to calculate hidden costs related to the platform.
- Determine the desired margin: Think about how much money you want to keep from each sale to cover advertising costs.
- Check competitors: See what price similar products are selling for, but don't blindly copy their price — your costs might be different.
Common Mistakes
- Focusing only on the purchase price: Forgetting shipping, advertising, or packaging costs.
- Competing with the lowest price: This reduces the margin and often makes it impossible to invest in advertising.
- Changing prices frequently without a strategy: Which confuses the customer and reduces trust.
Your Step Today
Take one product you plan to sell and write down all its possible costs (purchase, shipping, potential advertising).