A good price should do three things: It should cover what the product costs you, cover the costs of making the sale, and still leave something for your business.

Selling a lot does not help if you lose money on every order.

Start with what the product really costs you

First, work out how much it costs you to have one item ready to sell.

This may include the amount you paid your supplier, the materials you used to make it, packaging, transport and any other direct cost connected to that item.

For example, if you buy a pair of shoes for MWK 25,000 and spend MWK 500 on packaging, your cost is already MWK 25,500 before you have made any profit.

Do not ignore small costs simply because they look small. When you sell many items, they add up.

Add the costs of selling

Selling through Tambala also has costs.

Tambala Market charges a 3% platform commission on a sale. Payment or fulfilment costs may also apply depending on how the order is paid for and delivered.

You should understand these costs before deciding what you want to charge.

If you cover delivery yourself, include that cost too. If the customer pays delivery separately, you do not need to hide it inside the product price.

The important thing is to know who is paying for each cost.

Decide how much profit you need

Profit is what remains after the costs of the sale have been covered.

There is no single profit percentage that is right for every product.

A grocery item, phone, handmade dress and piece of furniture may all need very different margins.

Instead of choosing a percentage simply because someone told you it is “normal,” ask:

How much money is tied up in this product?
How quickly does it normally sell?
What happens if the item is damaged or returned?
How much work does it take to sell and fulfil?
What are customers willing to pay?
How much does the business need to earn for selling this item to be worthwhile?

Your price should leave enough profit for the business to continue operating and growing.

A simple example

Suppose you are selling a pair of shoes.

You paid MWK 25,000 for them and packaging costs another MWK 500.

You would like to keep about MWK 8,000 from the sale before any other costs you have not included.

That means you need to recover at least:

MWK 25,500 + MWK 8,000 = MWK 33,500

But the Tambala commission is also taken from the selling price, so simply pricing the shoes at MWK 33,500 would leave you slightly short of your target.

At a selling price of MWK 35,000, a 3% Tambala commission would be MWK 1,050.

After the commission, MWK 33,950 remains.

Subtract the MWK 25,500 product and packaging cost, and you keep: MWK 8,450

That gives you a much clearer picture of what the sale actually earns.

Think about delivery separately

Be careful not to accidentally pay for delivery from your profit.

If the customer collects the order, there may be little or no delivery cost.

If you provide delivery yourself, decide whether the customer will pay a separate delivery charge or whether you will include the cost in the product price.

If a courier or Tambala delivery option is used, understand how that cost is charged before setting your final price.

Customers should be able to see what the product costs and what delivery costs without surprises at checkout.

Check the market, but do not copy it blindly

Look at what similar products are selling for.

This helps you understand what customers may expect to pay, but another seller's price should not automatically become your price.

Their supplier may charge less. Their delivery costs may be different. They may buy in larger quantities. Their product may also be better or worse than yours.

Ask yourself whether your offer gives the customer a good reason to choose it at the price you are asking.

That reason might be quality, convenience, availability, service, faster fulfilment or simply a fair price for a good product.

Be careful with discounts

A discount reduces your selling price, but most of your costs remain the same.

Before running a promotion, calculate what you will actually keep after the discount.

For example, if you normally sell something for MWK 20,000 and reduce it to MWK 15,000, do not look only at the MWK 5,000 discount.

Ask:

After the product cost, selling costs and fulfilment costs, is there still enough profit left?

Discounts can be useful for clearing older stock, encouraging larger orders or supporting a seasonal promotion. They should have a reason.

A sale that loses money is not automatically a successful sale.

Do not use price alone to compete

Being the cheapest seller is not the only way to win customers.

Customers may be willing to pay more for a seller they trust, a better product, clearer information, faster delivery or better service.

If your price is higher, make the value clear.

If your product lasts longer, say so. If it includes something others do not, explain it. If you provide better support or easier collection, make that visible.

A customer should understand what they are getting for their money.

Review your prices when costs change

Your price does not have to stay the same forever.

Supplier prices may increase. Packaging may become more expensive. Delivery costs may change. You may also discover that you have been earning less than you expected.

Review important product prices from time to time and update them when the economics of the product change.

Do not wait until the business is losing money to notice.

Before you set the price

Make sure you know:

What the product costs you.
What packaging and other direct costs add.
Which selling and payment costs apply.
Who is paying for delivery.
How much you want the business to earn.
What similar products cost in the market.

Then ask one final question:

If I sell this product at this price, after everything is paid, am I happy with what is left?

If the answer is no, the price or the product needs another look.

Once your price is ready, you can update it in Add and Publish a Product or Edit and Manage Your Products.

If you are planning a sale or campaign, continue with Promotions, Advertising and Getting More Sales.