How to Price Your Products So You Never Sell at a Loss

Most small business owners price by feeling — copy what a competitor charges, round a number that "sounds right," or just see what customers will pay. The problem is that none of those methods tell you whether you're actually making money.

Correct pricing isn't a guess. It's a calculation, and it only needs five numbers.

The 5 numbers every price must cover

• Cost price — what you paid your supplier, per unit.
• Transport cost — getting the goods from supplier to you (or to the customer).
• Market or other fees — loading fees, packaging, platform charges, anything else attached to the sale.
• Quantity in the batch — costs like transport are often per-trip, not per-item, so they need to be spread across everything you bought.
• Your target profit margin — the percentage of the final price that should be profit, not just an amount added on top.

The formula

Add up your total cost per unit (cost + transport + fees, divided by quantity). Then divide that by (1 − your margin as a decimal). That gives you the selling price where your margin is exactly what you wanted — not roughly, exactly.

A quick walkthrough

Say you bought 10 hair wigs for ₦70,000 total, spent ₦4,000 on transport and ₦3,000 on market fees. Your total cost is ₦77,000 — ₦7,700 per unit. If you want a 30% margin, your selling price is ₦7,700 ÷ 0.70 = ₦11,000, giving you ₦3,300 profit per wig. Sell below that and you're trading time for nothing.

This is the exact math behind SabiBiz's free Pricing Calculator — you don't need to do it by hand every time.