Money8 min readUpdated 3 November 2026By the StockỌja team

How to price products for sale

Short answer

Work out your full cost per item, including transport and packaging, then add a markup that covers your running costs and leaves a profit. Check the price against what customers pay elsewhere, round it to a price that reads well, and update it whenever a new delivery costs you more.

Why pricing by feel loses money

Many shop owners set prices by looking at the shop next door, or by adding "something small" to what they paid. It feels safe, but it hides three problems: costs you forgot to count, a markup that is too thin to pay the rent, and old prices that never caught up with new supplier prices.

A pricing method takes ten minutes per product the first time and a few seconds after that. It is the difference between being busy and being profitable.

Step 1: find your true cost per item

Your cost is not just the price on the supplier’s invoice. It is everything you spent to get the item onto your shelf, divided by the number of items.

Purchase price. What you paid the supplier for the whole order.
Transport. Bus, keke, dispatch rider or waybill fees to bring the goods to your shop.
Loading and market levies. Fees you pay to collect or move goods.
Packaging. Nylon bags, boxes, labels or tags you add before selling.
Losses you can expect. Items that break, expire or go missing. If one in fifty usually spoils, spread that cost over the other forty-nine.

Cost for one carton of 24 body creams	Amount
Supplier price for the carton	₦96,000
Transport from the market	₦3,000
Branded nylon bags	₦1,200
Total cost for 24 pieces	₦100,200
True cost per piece	₦4,175

Divided by the invoice alone, the cost looks like ₦4,000. The extra ₦175 per piece is what many shops never price in.

Step 2: choose your markup or margin

Once you know your cost, decide how much to add. There are two ways to say it, and they give different answers.

Markup is profit as a percentage of cost. Selling price = cost × (1 + markup). Margin is profit as a percentage of the selling price. Selling price = cost ÷ (1 − margin). Pick one way of thinking and use it every time.

If you want this margin	Use this markup	A ₦4,175 cost sells at
20%	25%	₦5,219
25%	33%	₦5,567
30%	43%	₦5,964
40%	67%	₦6,958
50%	100%	₦8,350

Step 3: make sure the margin pays your running costs

Your profit on each item has to pay for rent, salaries, electricity, fuel and data before anything is left for you. A quick check: add up your monthly running costs, and estimate your monthly sales. Your average margin must be higher than running costs ÷ sales.

For a shop with ₦450,000 of monthly running costs that sells about ₦2,000,000 a month, running costs are 22.5% of sales. A 20% average margin would lose money every month; 30% leaves room for profit. Our guide on how to calculate profit in a small business shows how to get these numbers from your records.

Step 4: check the price against the market

Now compare. What do customers pay for the same item nearby, at the big supermarket and online? You don’t have to be the cheapest, but if you are far above everyone else, you need a reason customers will pay it: convenience, delivery, advice, a guarantee or a better experience.

If the market price is lower than your cost plus a healthy margin, don’t just cut your price. Look for a cheaper supplier, a bigger order discount, or a different product that earns more.

Step 5: set a price that reads well

Round to clean numbers. ₦5,964 becomes ₦6,000. Customers remember round prices and change is easier.
Keep price steps clear. If a small size is ₦3,500, the big size at ₦6,000 makes the difference obvious.
Price bundles carefully. A bundle should save the customer a little and still earn you more than one item alone.
Show the price. On the shelf, in your status and in your online store. Many customers who can’t see a price never ask.

Reprice when costs change

Supplier prices in Nigeria can change from one delivery to the next. Make repricing part of receiving stock: when a new delivery arrives, compare the new cost with the old one, and if it has gone up, update the selling price before the new stock goes on the shelf.

If you still have old stock at the old cost, you can sell it at the new price too. What matters is that your price covers what it will cost you to replace the item.

Common pricing mistakes

Confusing markup and margin. Adding 30% to cost gives a 23% margin, not 30%.
Forgetting transport and packaging. Small amounts per item add up to a large amount each month.
Copying a competitor who buys cheaper. Their price may be profitable for them and a loss for you.
Discounting everything to sell more. A 10% discount on a 25% margin removes 40% of your profit on that sale.
Never checking profit per product. Some of your busiest items may earn the least.

How StockỌja helps you price for profit

In StockỌja, each product has a selling price and an optional cost price. Add both and the product form shows your margin as you type, so you can see straight away whether a price works.

When a supplier raises their prices, update the cost and selling price in one place and the new price shows at the point of sale and in your online store. On the Scale and Thrive plans, the products report shows sales, cost, profit and margin for each product, and you can sort by most profit to see what really makes you money. You can start free with one store and upgrade when you need reports.

Questions

How do I calculate the selling price of a product?

Start with your full cost per item: the price you paid plus your share of transport, packaging and other costs of getting it into the shop. Then add your markup. For a 40% markup, multiply the cost by 1.4. If you think in margin instead, divide the cost by (1 − margin): for a 30% margin, divide by 0.7.

What is the difference between markup and margin?

Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. An item that costs ₦1,000 and sells for ₦1,500 has a 50% markup but a 33% margin. Mixing them up is one of the most common reasons shops earn less than they planned.

What is a good profit margin for a small shop?

It depends on what you sell and how fast it sells. Fast-moving items like drinks and provisions often carry thin margins, while fashion, beauty and accessories usually need more because they sell more slowly and some stock never sells. Work out the margin you need to cover your expenses, then check it against what similar shops charge.

Should I change my prices when my supplier increases theirs?

Yes. Reprice when new stock arrives at the new cost, not months later. If you keep the old price, every sale of the new stock earns less than you think, and you may only notice when the money doesn’t add up at the end of the month.

Should my online prices be the same as my shop prices?

Many shops keep them the same so customers trust both. If selling online costs you more, for example payment fees or packaging, make sure your price still covers those costs, or charge delivery separately so the product price stays the same everywhere.