Most online sellers price by copying a competitor and hoping. That is not a strategy — it is inheriting someone else's cost structure. Pricing is the fastest lever you have on profit: a 10% price rise usually beats a 10% sales rise, because it costs nothing to deliver.
Step 1: know your true cost per order
Not just what you paid the supplier. Count everything that moves with the order:
- Cost of the product
- Inbound freight and customs
- Packaging
- Delivery, including the ones that come back
- Payment gateway fee
- Your realistic return and COD refusal rate
Sellers routinely discover their "profitable" bestseller earns almost nothing once refused deliveries are included. You cannot price sensibly until this number is honest.
Step 2: set a floor, not a price
Your floor is total cost plus the minimum margin that keeps the business alive after overheads. Nothing gets sold below it, however tempting the competitor's price is. Competing below your floor is buying customers with money you do not have.
Step 3: decide where you sit
Pick one deliberately:
- Cheapest — only survivable with genuine cost advantage and volume. Rarely available to a small seller.
- Middle — fair price, better service. Where most successful small stores live.
- Premium — higher price justified by quality, expertise, or an experience the cheap option cannot deliver.
The dangerous position is accidentally in the middle with nothing to justify it — more expensive than the cheapest, less trusted than the best.
Step 4: research competitors properly
Compare like with like. A competitor's lower price often excludes delivery, or is for a smaller size, or comes with no warranty and no returns. Build the comparison on total cost to the customer, and note what they do not offer — that gap is what justifies your price.
Step 5: use the small pricing conventions
They are minor but free:
- Charm pricing — Rs 999 reads meaningfully cheaper than Rs 1,000.
- Round numbers for premium — Rs 5,000 feels more considered than Rs 4,999 on a luxury item.
- Anchoring — showing a higher option first makes the one you want to sell look reasonable.
- Show the saving in rupees on larger items, and in percent on smaller ones.
Step 6: include delivery in the decision
In Nepal, delivery charges shown late are the leading cause of abandoned carts. You have three honest options: charge it and show it early, build it into the price and offer free delivery, or set a free-delivery threshold. All three beat surprising someone at checkout.
Step 7: change prices deliberately
Raise prices on your slowest-moving items first — the risk is lowest and it tells you how sensitive your customers really are. Give any change three or four weeks before judging. And avoid constant discounting: a store permanently on sale teaches customers to wait, and its full price stops meaning anything.
The short version
Work out your true cost per order including returns, set a floor you never cross, choose your position deliberately, compare competitors on total cost to the customer, handle delivery charges honestly, and test increases on slow movers first.
Comments
Be the first to comment.