In this guide+
Most small sellers underprice. They copy competitors or add a little to the purchase cost, then discover that delivery, packaging, returns and payment fees ate the profit. Pricing starts with knowing your real cost per order.
Step 1: your true cost per order
| Cost | Example |
|---|---|
| Product cost (or making cost) | ₹400 |
| Packaging | ₹25 |
| Delivery you pay | ₹70 |
| Payment fees (about 2% online) | ₹20 |
| Returns allowance (share of RTO cost) | ₹30 |
| Ad / marketing cost per order | ₹80 |
| True cost | ₹625 |
Step 2: choose a margin
Margin is profit as a share of the selling price. If you want a 40% margin on a ₹625 cost: price = 625 ÷ (1 − 0.40) ≈ ₹1,042, so you'd price at ₹1,049 or ₹999 with a lower cost. Try it in our pricing calculator.
Tip: Markup and margin are different. A 50% markup on ₹600 is ₹900 — but that's only a 33% margin. Always plan in margin.
Step 3: price presentation
- Charm prices (₹999, ₹1,499) still work well in India.
- MRP and price: show a struck-through MRP only if it's genuine. Inflated MRPs erode trust and can break consumer rules.
- Free delivery above a value a little higher than your average order nudges buyers to add one more item.
- Bundles (“any 3 for ₹999”) move slower stock and raise order value.
Step 4: review monthly
Check your best and worst sellers each month. If a product sells out instantly, you may be underpriced. If it never sells, the problem is usually photos or positioning, not only price.
Frequently asked questions
What's a good profit margin for an online store?
It varies by category. Fashion and accessories brands often aim higher than electronics resellers. Work back from your true cost per order and make sure there's room for ads and returns.
Ready to try it?
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