How to price so you still make money after commission

Plenty of sellers price by looking at what the shop next door charges, then discover months later that the margin was never there. Here is a way to do it that survives contact with reality.

Start from your cost, not from the competition

Write down what one unit actually costs you to have ready to sell:

• What you paid for it, or what the materials cost
• Transport to get it to you
• Packaging
• Your time, if you made it
• Anything you throw away, damage or cannot sell

That last one catches people out. If one in ten items is damaged or unsold, your real cost per sold unit is higher than your purchase price.

Add the margin you need

Decide what you want to earn per unit before any platform takes anything. Be honest here rather than optimistic.

Then work backwards through the commission

Sokomoja takes 9 percent, so you receive 91 percent of your listed price. To find the price that leaves you what you need, divide rather than multiply.

If you need KSh 1,000 in hand, do not add 9 percent and list at KSh 1,090. That leaves you KSh 991. Divide instead:

KSh 1,000 divided by 0.91 = KSh 1,099

List at KSh 1,100 and you receive KSh 1,001. The difference looks small on one item. Across two hundred sales it is real money.

Do not price delivery into the item

The buyer pays delivery separately at checkout and it goes to the logistics partner, not to us and not out of your earnings. If you build a delivery buffer into your item price, you are competing with one hand tied: your listing looks more expensive than an identical one next to it, and you gain nothing for it.

Sense check it against the market

Now, and only now, look at what similar items sell for. If your number lands far above, the question is whether your costs are too high or whether you have something worth the difference and are not saying so in the listing. If it lands far below, you are probably absorbing a cost you have not counted.

The commission breakdown is on the Pricing and Commission page.