Pricing Strategy Guide
Learn how to price your products competitively and maximize profits
Why Pricing Strategy Matters
Setting the right price is crucial for your success. Price too high and you lose customers. Price too low and you lose profits. This guide will help you find the sweet spot.
💰 Interactive Profit Calculator
Enter Your Costs
Pricing Breakdown
Based on 40% profit margin
💡 Quick Tips
- • 30-50% margin is ideal for most products
- • Consider competitor pricing
- • Factor in seasonal demand
- • Review pricing every 3 months
📊 Understanding Cost Components
Direct Costs
- • Product manufacturing/purchase
- • Materials & components
- • Labor (if applicable)
- • Quality control
Shipping & Logistics
- • Packaging materials
- • Shipping fees
- • Handling costs
- • Insurance (optional)
Platform & Fees
- • Commission (8-20%)
- • Payment processing (2.9% + $0.30)
- • Marketing/ads
- • Returns buffer (5-10%)
📝 Cost Calculation Formula
Selling Price = (Product Cost + Shipping + Packaging) × (1 + Profit Margin %) + Platform Fees
Example: (10,000 + 3,000 + 1,000) × 1.4 + 2,471 = TZS 23,333
🔍 Competitor Analysis Guide
How to Research Competitor Pricing
Identify Direct Competitors
Find 5-10 sellers offering similar products. Look at their ratings, reviews, and sales volume.
Record Price Points
Note their regular prices, sale prices, and shipping costs. Look for patterns and averages.
Analyze Value Proposition
What extra value do they offer? Better quality? Faster shipping? Better customer service?
Position Your Pricing
Decide: Premium (higher), Competitive (similar), or Budget (lower) pricing strategy.
| Competitor | Price (TZS) | Shipping | Rating | Sales/Month | Notes |
|---|---|---|---|---|---|
| Competitor A | 25,000 | Free |
★★★★☆
4.2
|
150+ | Premium brand, high quality |
| Competitor B | 22,000 | 3,000 |
★★★★★
4.8
|
300+ | Best seller, fast shipping |
| Competitor C | 18,000 | 5,000 |
★★★☆☆
3.5
|
50+ | Budget option, slower shipping |
| Your Target | 23,333 | 3,000 | New | - | Competitive pricing strategy |
🎯 Different Pricing Strategies
Cost-Plus Pricing
Add a fixed percentage or amount to your costs. Simple and ensures profit.
Competitive Pricing
Match or beat competitor prices. Good for gaining market share.
Value-Based Pricing
Price based on perceived value to customer. Highest profit potential.
Penetration Pricing
Start low to attract customers, then raise prices gradually.
Dynamic Pricing
Adjust prices based on demand, season, or competitor changes.
Bundle Pricing
Sell multiple products together at a discounted rate.
💡 Advanced Pricing Tips
Psychological Pricing
- Charm Pricing: Use .99 or .97 endings (TZS 23,999 instead of 24,000)
- Tiered Pricing: Offer good/better/best options
- Anchoring: Show "original price" crossed out next to sale price
When to Adjust Prices
- Seasonal: Increase during holidays, decrease off-season
- Competition: React to competitor price changes
- Cost Changes: Adjust when supplier costs increase
Ready to Optimize Your Prices?
Use our calculator and strategies to maximize your profits