Pricing Your Product as an Online Seller


It’s your job to assert the value that you bring to the table and charge accordingly for what you offer potential customers. The price tag on your product tells consumers a lot about the intentions and philosophy of your business. It will ultimately determine the work you’ll have to put in to meet your bottom line.


There are costs to consider on the manufacturing end, plus you’ll have to pay for shipping and warehousing while you go through your inventory. You’ll have operational and staff costs, and you’ll more than likely put money into promoting your new releases. A smart business owner will consider all of these elements when choosing a price point.


Pricing structure goes well beyond numbers, and the way you price your inventory comes with implications regarding your brand image in addition to impacting your margins. Factor in competing businesses and the state of the economy, and you have a real puzzle to solve. If you’re looking for tips on finding your pricing structure and appealing to your customers while making a profit, feel free to read ahead.


Woman in a clothing shop


Think About Manufacturing Costs

Before you can offer your products to the public, they have to be physically fabricated. Mass production continues to become easier, but you still have to think about quantity when it comes to your budget.


Large businesses that manufacture large quantities of products at a time save a great deal of money through mass production. This brings down the cost of each item and makes it easier to meet the overhead costs. The prices are marked up, sometimes to the point where the companies make hundreds of times more money selling goods that they manufactured at a low price point. Thus, businesses like these tend to have more flexibility with their pricing.


A small business owner that doesn’t have the same funds and resources as a large corporation will have a different approach when determining a pricing structure. Smaller manufacturing orders typically translate to a higher cost per item, which means each item will have to be sold at a higher price point in order to make the money back. Keep in mind that you’ll still have to consider shipping and marketing costs.


If you’re setting up a small business out of your garage or a shop on a site like Etsy, you might manufacture your goods personally. On the positive side, you’ll only have to pay for the raw materials to make the products. On the negative side, you’ll spend a lot of your time fabricating your products. In this case, you must put a number value on your time. Handcrafted decorations with meticulous attention to detail take a long time to create, so you might increase the price based on the amount of work you put into the piece.


Now Consider Your Overhead

Your business needs to keep functioning, even during slow periods. You’re going to be faced with consistent, time-sensitive expenses, so you’ll need the overhead to cover them. Overhead costs include rent and utilities, salaries for your workers, and cleaning services that keep the business operational. There are also expenses that can vary, like re-upping inventory or hiring a few seasonal employees.


The good news is that online businesses don’t have to worry about some of these expenses. You don’t need to pay for a separate building and separate utilities if you can operate your business online from your own home. With less overhead stress, there’s more wiggle room to choose a price point.


"Assert the value that you bring to the table and charge accordingly for what  you offer."  -Click to Tweet-


Carefully Budget Your Marketing Campaign

It’s tough to sell products that nobody knows exist, which is where your marketing strategy comes in. Although you can promote your products for free through social media outlets like Twitter and Instagram, you can reach a wider audience by backing your campaign with some funds.


Paid advertising on social media sites like Facebook or seller platforms like Amazon grants your posts more exposure, so the chances of catching an interested party’s eye are increased. Your brand name will be right there in the post, so it will also draw curious buyers in to see what you’re all about. Leave some room in the budget for your marketing campaign to ultimately boost sales.


Online (and offline) marketplaces may also charge you a fee to host your shop or your individual products, which is another piece to the price point puzzle. Overall, the price of each individual product should reflect its share of the marketing expenses. Even a piece that cost you zero dollars to make will still cost money to sell.


Stay True to Your Brand Philosophy

Once you know how much it costs to manufacture your products, keep the lights on, and market yourself, you’ll have an idea on how to decide your price point. At this point, it helps to take a look in the mirror and analyze the philosophy of your brand.


The previously mentioned factors will help point you in the right direction, but there are tons of decisions to make before landing on an actual figure. Will you charge an extra dollar for slightly higher quality materials? Are you marketing your products based on their affordability or their luxury? Would you donate a portion of each sale to a local relief fund or other charity?


Consumers know that businesses have to make money in order to stay afloat, but the way each company handles themselves makes a world of difference. It’s nice for people to see big businesses selling products cheaper than they could get away with, and this does good things for brand image. Companies that get greedy and try to maximize profit without offering high-quality products won’t be received so well. Think about your goals and your message as a brand, and choose a price point that will satisfy your financial needs while being reasonable and attractive to consumers.


Phone with price tag


Types of Pricing Structures

  • Cost-Plus — A cost-plus pricing structure is quick and easy to use, but it doesn’t account for certain variables like the economic landscape and demands of your market. This structure simply combines the cost of materials and manufacturing with the cost of overhead, and then adds in the profit goal.

  • Markup — If you don’t have a set profit in mind but you want to be sure you make one, you can try the markup method. This is just like the cost-plus structure, but you add half the cost of materials, manufacturing, and overhead to the total to land on a number.

  • Demand — The concept of supply and demand is one of the basic cornerstones of marketing, and the demand structure analyzes the market’s needs. If you sell an exclusive product that everyone wants but no one can find, you can stand to raise your price point quite a bit.

  • Competitive — Competition is another cornerstone of marketing in a capitalist economy. This price structure is based on selling products cheaper than the competition does.


Choosing Your Pricing on Amazon

Amazon gives buyers tools to find the products they need, and they give sellers tools to gain exposure and move more inventory. As a business owner, you want your products to show up at the top of the first search results page. Before you do that, see what’s already there. Look at the top listings for products similar to yours, and make sure your prices don’t look too far off. With some sales history and careful pricing, you can see your sales increase as you take over the top results.



Pricing will determine the longevity of your business as an online seller. Always consider your margins and the value you’re offering to the consumer. Do your homework and research what possible competitors are charging in your field. Account for overhead costs you accumulate during production and the shipping process. Budget your ad spend and stay true to your purpose and voice as a brand. Attention to detail and a realistic pricing model are invaluable tools on the road to success as an online seller.

New call-to-action



Gain access to our exclusive list of top rated events for e-commerce sellers


Get E-Commerce News Right To Your FB Inbox!