Pricing your products the right way is one of the most important decisions you’ll make as a business owner. Charge too little, and you’ll struggle to make a profit. Charge too much, and customers might look elsewhere.
So, how do you find the sweet spot—a price that covers costs, attracts customers, and maximizes your profits? Let’s break it down! 👇
1. Know Your True Costs (So You’re Not Losing Money!)
Before setting a price, you need to calculate the true cost of your product. Many small business owners undercharge because they don’t factor in all expenses.
📌 Make sure to include:
✅ Materials & supplies – Vinyl, blanks, packaging, ink, etc.
✅ Labor costs – Your time and any hired help.
✅ Shipping & packaging – Boxes, bubble wrap, mailers.
✅ Overhead expenses – Software, website, equipment maintenance.
✅ Transaction fees – PayPal, Shopify, credit card processing.
✅ Marketing & ads – Social media promotions, influencer collaborations.
🔥 Pro Tip: Use a pricing calculator like Craftybase or Omni Calculator to ensure you’re not underpricing!
2. Use the Cost-Plus Pricing Method (A Simple Formula!)
One of the easiest ways to set a profitable price is the Cost-Plus Pricing Method.
📌 Formula:
👉 (Total Cost per Item) + (Profit Markup) = Selling Price
✅ Example:
If it costs you $8 to make a custom tumbler and you want a 50% profit margin, you’d price it at:
👉 $8 + ($8 x 0.50) = $12
📌 Standard Markup Ranges:
✅ Retail markup: 50% – 300%
✅ Handmade/custom products: 2x – 3x the cost
✅ Wholesale pricing: Cost x2
🔥 Pro Tip: If you sell wholesale, use Keystone Pricing (double your wholesale price for retail).
3. Test Psychological Pricing (Because Numbers Matter!)
Believe it or not, the way you price your products can influence buying decisions!
📌 Psychological Pricing Tricks:
✅ Use “charm pricing” – Instead of $20.00, price at $19.99 (makes it feel cheaper).
✅ Price in bundles – Sell 3 stickers for $10 instead of $3.50 each.
✅ Offer tiered pricing – Example: “Buy 1 for $10, Buy 3 for $25.”
✅ Highlight the savings – Example: “Normally $40, NOW $29.99!”
🔥 Pro Tip: Show a comparison price (crossed-out old price + sale price) to boost perceived value.
4. Offer Multiple Pricing Options (For Different Budgets)
Not all customers shop the same way—some want the cheapest option, while others want premium quality. Offering multiple price points gives customers choices without lowering your profits!
📌 How to Set Up Tiered Pricing:
✅ Basic – A budget-friendly option ($10)
✅ Standard – Your main product ($20)
✅ Premium – An upgraded, high-end version ($30)
🔥 Example: If you sell custom mugs:
👉 Basic: Plain ceramic mug with one-color design.
👉 Standard: Full-color custom design with premium packaging.
👉 Premium: Custom design + name personalization + matching coaster.
5. Use “Perceived Value” to Charge Higher Prices
Customers will pay more if they feel like they’re getting extra value. You can increase perceived value without increasing costs!
📌 Ways to Boost Perceived Value:
✅ Better packaging – Aesthetic, branded packaging makes it feel high-end.
✅ Limited edition designs – People will pay more for exclusivity!
✅ Premium materials – Advertise high-quality materials (“handmade,” “organic,” “durable”).
✅ Showcase customer reviews – Adds social proof that your products are worth it.
🔥 Pro Tip: Use a higher anchor price before discounts (e.g., “Originally $50, Now $35!”) to increase perceived savings.
6. Add Upsells & Bundles to Increase Profit per Sale
Instead of just selling one product at a time, increase your average order value (AOV) by offering bundles, upsells, and add-ons.
📌 Examples of Bundling & Upselling:
✅ “Complete the set” – Sell a matching tumbler + sticker + tote as a bundle.
✅ Upsell at Checkout – “Want a matching keychain for just $5 more?”
✅ Gift sets – “Buy 3 stickers, get 1 free!”
🔥 Pro Tip: Use ReConvert (Shopify app) to add upsells at checkout automatically!
7. Don’t Race to the Bottom – Compete on VALUE, Not Price
Many small business owners undercut their prices because they’re afraid of losing customers. But here’s the truth:
Cheap pricing attracts bargain hunters who won’t be loyal. Instead, focus on what makes your brand stand out!
📌 How to Compete Without Lowering Prices:
✅ Offer a better customer experience – Fast shipping, friendly service, beautiful packaging.
✅ Differentiate your product – Unique designs, exclusive collections, or handmade quality.
✅ Market your brand story – People love supporting small businesses with a personal touch.
🔥 Pro Tip: Higher prices can actually make your product look more premium & desirable!
8. Adjust Your Pricing Over Time
Your pricing shouldn’t be set in stone—as your costs go up and your business grows, you should adjust accordingly.
📌 When to Raise Your Prices:
✅ Material costs increase (e.g., vinyl, blanks, packaging).
✅ You’re working too much but not making enough profit.
✅ Your brand has gained popularity & demand is high.
🔥 Pro Tip: Instead of announcing, "We’re raising prices," reframe it as:
👉 "We’re introducing new, premium-quality designs at an exclusive price!"
Final Thoughts: Charge What You’re Worth! 💰🚀
If you want a profitable, sustainable business, you can’t price based on what “feels right”—you need a strategy that ensures every sale brings in profit.
✅ Know your costs so you’re not underpricing.
✅ Use cost-plus pricing to set a strong profit margin.
✅ Try psychological pricing to boost conversions.
✅ Offer multiple price points for different budgets.
✅ Bundle and upsell to increase order value.
✅ Compete on value, not price.
✅ Adjust pricing as your business grows!
💬 Have you struggled with pricing? What strategy has worked best for you? Let’s chat in the comments! 🚀
