How do you set the price of a product in an online shop and on a marketplace?

The price of a product should be attractive to the customer, whilst at the same time covering all costs and ensuring a profit. Matching the price of the cheapest competitor often leads to a price war, in which the retailer increases turnover but loses profitability.

A good pricing policy starts with calculating the minimum price, and only then takes into account the competition, the value of the offer and promotions.

Start with the full cost of the product

Add all costs attributable to the sale of a single unit to the purchase price:

·        transport to the warehouse,

·        customs duties and clearance,

·        packaging,

·        marketplace commission,

·        payments,

·        advertising,

·        delivery,

·        storage,

·        order fulfilment,

·        provision for returns and complaints,

·        share of fixed costs.

If any cost depends on the selling price, for example a percentage commission, the calculation must be carried out using a spreadsheet or formula that takes this relationship into account.

What is the minimum price?

The minimum price is the lowest price at which sales still achieve the target result. It should not be confused with a promotional price or the competitors’ price.

Three thresholds can be identified:

Break-even price – covers costs but does not provide a safe profit.

The minimum operating price – ensures a set minimum amount or percentage of profit.

Regular price – leaves room for promotions, advertising and unforeseen costs.

This allows the seller to know how deep a discount they can offer without selling at a loss.

Example of price setting

Let’s assume that the total cost of the product before commission is 60 zł net, and the platform’s commission is 12% of the price. The seller wants to make a profit of at least 15 zł net.

The price cannot simply be 75 zł, as commission will still be deducted from this amount. At a price of 90 zł:

·        12% commission: 10.80 zł,

·        other costs: 60 zł,

·        profit: 19.20 zł.

At a price of 80 zł:

·        commission: 9.60 zł,

·        other costs: 60 zł,

·        profit: 10.40 zł.

In this example, 80 zł does not meet the profit target, even though the price still exceeds the purchase cost.

Check your competitors’ prices, but do not copy them without analysis

Compare genuinely similar offers. Pay attention to:

·        the number of items in the set,

·        brand,

·        quality and specifications,

·        delivery time,

·        postage costs,

·        warranty,

·        reviews,

·        contents of the set,

·        additional services.

A cheaper offer may involve a smaller package, a lower-quality version of the product, or a longer delivery time. The price only makes sense in the context of the entire offer.

Price in your own shop versus price on a marketplace

On a marketplace, the seller pays commission, promotional fees and often part of the delivery costs. In their own shop, they may not pay commission on sales, but they bear the cost of driving traffic, the payment provider and platform maintenance.

Therefore, an identical price across all channels does not always yield the same profit. Profitability must be calculated separately for each sales channel.

You should also check the platforms’ policies regarding prices and promotions.

Regular and promotional prices

The regular price should be a realistic selling price, not an artificially inflated figure used solely to highlight a discount. Before launching a promotion, calculate:

·        the lowest permissible price,

·        the projected increase in sales,

·        the cost of additional advertising,

·        potential impact on subsequent purchases,

·        stock levels.

When offering price reductions aimed at consumers, the lowest price over the period required by regulations must be correctly displayed.

How to make the most of product bundles?

A bundle allows you to increase the value of the shopping basket and reduce the proportion of delivery costs in revenue. It can also make it more difficult to compare directly with competitors’ offers.

A good bundle should combine products that the customer can actually use together. The bundle discount must be calculated based on the total margin, rather than set arbitrarily.

The psychology of pricing – when does it matter?

Price endings, free delivery thresholds and highlighting the best option can influence the customer’s decision, but they won’t make up for a poor offer. First, focus on product value, photos, information and trust.

In the budget segment, a price ending in 99 groszy may be natural. For premium products, a simpler, full price often works better. It’s worth testing rather than assuming a single approach for the entire range.

How should you test prices?

Introduce price changes in a controlled manner. Compare not only the number of orders, but also:

·        revenue,

·        gross profit,

·        profit margin,

·        advertising cost,

·        conversion rate,

·        basket value,

·        number of returns.

A lower price may improve conversion rates, but reduce overall profit. Sometimes selling fewer items at a higher price is more profitable.

When should you raise the price?

It is worth considering a price increase when:

·        the product regularly sells out,

·        advertising costs are rising,

·        the cost of purchasing or delivery has increased,

·        the offer has better reviews than the competition,

·        the product description, photos or customer service have been improved,

·        demand exceeds available stock.

The price increase doesn’t have to be large. A small price adjustment with high volume can significantly improve results.

FAQ

Can the price in the shop be different from that on the marketplace?

Yes, as the channels have different costs. However, you need to check the terms and conditions of the platform in question and maintain transparent communication with customers.

How often should prices be updated?

Always following a significant change in purchase cost, exchange rate, commission, delivery charges or advertising costs. In a dynamic market, it is worth monitoring profitability at least once a month.

Is it always worth being the cheapest?

No. Customers also evaluate delivery, reviews, reliability, photos, product range and customer service. The lowest price is a difficult advantage to maintain and often leads to margins that are too low.

Summary

First, calculate the full cost, break-even price and expected profit. Then compare the competition and adjust your price to reflect the value of the entire offer. Do not judge your pricing policy solely by the number of orders – the most important factor is profit after all costs.

Editorial sources – no need to publish

·        Biznes.gov.pl – rules on reporting price reductions

·        Allegro – sales fees

·        Amazon – seller fees