Ecommerce Pricing: Simple Ways to Set Prices That Work

Setting the right price for your products feels a bit like guessing the perfect temperature for a shower – too hot and you scare people away, too cold and they lose interest. The good news is you don’t have to guess. With a few clear steps you can pick prices that cover costs, stay competitive, and still make a profit.

First, write down every cost that goes into a product. This includes the supplier price, shipping, taxes, packaging, and any fees from your payment gateway. Add a small buffer for returns or unexpected expenses. That number is your baseline cost. Anything you charge below it means you’re losing money on each sale.

Common Pricing Models

Most online stores fall into one of three easy‑to‑understand models:

• Cost‑plus pricing – Take your baseline cost and add a fixed percentage markup. If a t‑shirt costs £10 and you want a 50% profit, you’d price it at £15.
• Value‑based pricing – Look at how much value the product gives the customer. If a design tool saves a freelancer £200 a month, you can charge far more than the cost‑plus amount.
• Market‑oriented pricing – Scan what competitors charge and position yourself around that range. You might price a bit lower to attract bargain hunters or a bit higher if you offer premium support.

Pick the model that matches your product type and brand voice. You can even blend them – start with cost‑plus to cover basics, then adjust up or down based on market research.

Tips to Pick the Right Price

Test, test, test. Use A/B testing tools to show two different prices to similar visitors. Track conversion rates and average order value. The price that gives you the best overall profit is your winner.

Round numbers work. Shoppers often skim prices. A clean £19.99 looks cheaper than £20.00, even though the difference is just a penny.

Bundle smartly. Group related items and offer a discount on the bundle. This boosts the perceived value and moves more inventory.

Show savings. If you’re offering a discount, display the original price next to the new one. Customers love seeing the exact amount they’re saving.

Keep an eye on fees. Platforms like PayPal or Stripe take a cut of each sale. Factor those fees into your baseline cost so you don’t get a surprise after the fact.

Finally, don’t set prices and forget them. Review them every quarter. Look at changes in supplier costs, shipping rates, or new competitors entering the market. Small tweaks can keep your margins healthy without scaring away buyers.

By breaking down costs, choosing a clear pricing model, and testing what works, you’ll stop guessing and start pricing with confidence. Your store will look more professional, your profit margin improves, and customers feel they’re getting a fair deal – a win‑win for everyone.