How to price your products: the price formula with a full online-store example
How to price a product in an online store: the full cost per order with shipping, ads, returns and collection fees, the price formula with your margin, a worked step-by-step example, and pricing a digital product.
The ArabyBot teamOfficial Meta partner · written from our own platform dataOn this page 4
The short answer
Price a product from its full cost per order actually delivered, not from the purchase price alone: the product, packaging, shipping if you pay it, ad cost per order, a share for returns and collection fees. Then divide that total by (1 − the margin you want). A product with a full cost of EGP 305 and a target of 30% of the price is priced at 305 ÷ 0.7 ≈ 436, so you sell it at 449. What is most often forgotten is the share for returns and ads, and those are what turn an apparent profit into a loss.
Also asked as: «كيف اسعر منتجاتي» · «ازاي احسب سعر بيع المنتج» · «طريقة تسعير منتج للبيع اون لاين» · «كيف اسعر منتج رقمي» · «how to price my products» · «product pricing formula ecommerce»
The full cost per delivered order
The most common mistake is pricing from the purchase price: “I bought it for 150 and sell it for 250, so I make 100”. But one order costs you more than the product. Here is an example for a product in an Egyptian store selling cash on delivery:
| Item | Per delivered order | How it was worked out |
|---|---|---|
| The product | EGP 150 | The supplier's price |
| Packaging | EGP 10 | Box, bag and label |
| Shipping | EGP 50 | If you pay the shipping |
| Ads | EGP 60 | Ad spend ÷ the orders it brought |
| Returns allowance | EGP 25 | 20 returns per 100 orders, each costing 100 out and back: 2,000 ÷ 80 delivered |
| Collection fee | EGP 10 | The courier's cash-on-delivery fee |
| Total | EGP 305 | The full cost per delivered order |
So selling it at 250 would lose you EGP 55 per order, even though the gap between buying and selling looks like 100. To work out the returns allowance with your own numbers: the cash-on-delivery returns calculator.
The price formula
You want 30% of the selling price as profit: 305 ÷ (1 − 0.30) = 305 ÷ 0.70 ≈ EGP 436. Round it to a price customers read easily such as 449, and your profit is EGP 144, about 32% of the price. Do not work it out as 305 + 30%: that gives 397 and only 23% of the price.
The difference between margin on the price and markup on the cost is explained in profit margin.
Where to find profit without raising the price
| Item | What lowers it | Effect in the example |
|---|---|---|
| Returns allowance | Confirming every order on WhatsApp before shipping catches non-serious orders and incomplete addresses | If returns fall from 20% to 10%: from 25 to about 11 per order |
| Ads per order | A fast reply to every message and comment the ad brought | More orders from the same budget lower the 60 |
| Shipping | Free shipping above a threshold that raises the order value | Shipping is spread over two pieces instead of one |
There is no commission on orders in ArabyBot Store, so no share of each sale is added to your cost. And WhatsApp order confirmation works with your store whatever its platform.
Frequently asked questions
Do I price the same as my competitor?
Know their price, but do not start from it. Start from your full cost: if their price is below it, they are losing money or counting differently, and a race to the bottom loses for everyone. Compete on what sets you apart: reply speed, delivery and warranty.
Is free shipping part of the price?
Yes; “free” shipping is paid by someone, and if the customer does not pay it, it comes out of your profit. Add it to the full cost, or make it free above a threshold that raises the order value. Free shipping.
How do I price a digital product?
There is no shipping, no returns and almost no cost per copy, which leaves ads and payment fees. Its price is set by its value to the customer, not its cost: how much time or money it saves them. Selling digital products.
When do I raise the price?
When your full cost rises, or when the product sells faster than you can supply it. Raise it on new stock first, and tell your regular customers beforehand with a message.
How we write these guides Figures come from our platform and Meta's actual invoices, dated with their sample; we describe what works today, not what we plan, and say what we do not do and when someone else is the better choice. Reviewed by the ArabyBot team on 21 October 2026.
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