One of the most important decisions you will make as an online seller is deciding how much to charge for your products.
Set the price too high and potential customers may look elsewhere.
Set it too low and you may make little profit—or even lose money without realizing it.
The goal isn't simply to find the cheapest price.
You need to find a price that covers your costs, gives you a reasonable profit and still makes sense to your target customers.
Here is a practical guide to pricing your products for online sales in Nigeria.
1Know exactly how much the product costs you
Before deciding your selling price, calculate your actual cost.
If you buy a product for ₦20,000, that doesn't necessarily mean ₦20,000 is your total cost. You may also spend money on:
- Transportation
- Packaging
- Delivery preparation
- Importation or sourcing
- Storage
- Advertising
- Payment or marketplace fees
- Other business expenses
Understanding your total cost helps you avoid accidentally selling at a loss.
Simple example
Suppose you buy a product for ₦20,000. You spend ₦1,000 on packaging and ₦1,500 on transportation and other selling expenses.
Your effective cost is now ₦22,500.
If you sell the product for ₦22,000, it may look like you made a sale, but you've actually lost money.
Always calculate the full cost before setting your price.
2Decide how much profit you want
After calculating your costs, determine the profit you want to make.
For example, if your total cost is ₦22,500 and you want to make ₦5,000 profit: ₦22,500 + ₦5,000 = ₦27,500.
Your selling price would therefore need to be at least ₦27,500 before considering any additional fees or discounts.
Your desired profit may differ depending on the product, market and amount of work involved.
3Research similar products
Look at what other sellers are charging for similar products. Check multiple sellers rather than relying on one listing.
Pay attention to:
- Product quality
- Brand
- Condition
- Features
- Size
- Location
- Delivery options
- Seller reputation
Two products may look similar but have important differences. Don't automatically assume that the lowest price is the correct price for your product.
4Don't try to be the cheapest seller
Many new sellers believe that the only way to attract customers is to offer the lowest price. That can become a problem.
If your profit margin is extremely small, you may struggle to pay for packaging, delivery, advertising or unexpected expenses.
Instead of always trying to be the cheapest, think about the overall value you provide. Customers may be willing to pay more for:
- Better quality
- Better service
- Faster communication
- Reliable delivery
- Better packaging
- Authentic products
- Clear product information
- A trustworthy seller
5Consider your target customer
Your ideal customer matters when setting a price.
A product aimed at budget-conscious customers may need a different pricing strategy from a premium product aimed at customers who prioritize quality or convenience.
Think about who you are selling to and what matters to them. Understanding your customers can help you position your product more effectively.
6Remember delivery costs
Delivery is an important part of online selling.
If a customer sees a product listed for ₦30,000, they may still need to pay a separate delivery fee. Be clear about this.
If delivery is included in your price, understand how much it normally costs. If delivery is paid separately by the customer, communicate that clearly before the order is completed.
Unexpected delivery charges can create frustration.
7Leave room for reasonable discounts
Some sellers like to negotiate.
If you know that customers regularly ask for a small discount, you can take this into account when setting your initial price.
For example, if your target selling price is ₦50,000, you may decide to list at ₦52,000 if your costs and market allow for a small negotiation.
However, don't inflate your price excessively just to create the appearance of a discount. Your pricing should remain realistic.
8Don't copy another seller's price blindly
A competitor may be selling the same-looking product for ₦40,000. That doesn't automatically mean you should also sell yours for ₦40,000.
They may have:
- A different supplier
- Lower operating costs
- Higher sales volume
- Different product quality
- A different target market
- A promotional strategy
Use competitors as a reference, not as the only factor determining your price.
9Consider product quality and condition
New and used products should not be priced the same way.
If you're selling a used phone, for example, consider:
- Age
- Physical condition
- Battery health
- Storage capacity
- Accessories
- Repairs
- Warranty
- Other relevant features
Be honest about the condition. A lower price doesn't make a damaged or defective product acceptable if the condition wasn't properly disclosed.
Transparency helps protect your reputation.
10Review your prices regularly
Prices don't stay the same forever.
Your supplier may increase their price. Transportation costs may change. Exchange rates can affect imported products. Your competitors may change their prices. Your own business expenses may also increase.
Review your prices periodically instead of setting them once and forgetting about them. If your costs change significantly, your selling price may need to change too.
11Understand the difference between revenue and profit
This is one of the most important lessons for a new seller.
If you sell 20 products at ₦50,000 each, your sales revenue is ₦1,000,000.
That does not mean you made ₦1,000,000 profit. You still need to subtract the cost of the products and your other business expenses.
Always track your actual profit. A business can have impressive sales numbers and still struggle financially if its expenses are too high.
12Keep track of your numbers
You don't need complicated accounting software to get started. A simple spreadsheet can help you track your costs against your selling price:
| Item | Amount |
|---|---|
| Product cost | ₦20,000 |
| Packaging | ₦1,000 |
| Other expenses | ₦1,500 |
| Total cost | ₦22,500 |
| Selling price | ₦27,500 |
| Estimated profit | ₦5,000 |
As your business grows, proper financial records become even more important.
13Think about your marketplace and payment costs
If you sell through an online marketplace or use a payment service, there may be transaction or service fees depending on the platform and transaction.
Make sure you understand those costs before finalizing your pricing.
For eligible transactions on Salmart, buyers and sellers can use Salmart's transaction-protection process, which provides an additional layer of security during the transaction.
Understanding the costs and processes involved in your selling platform helps you price your products more accurately.
14Test and learn
You don't always have to get your pricing strategy perfect on the first attempt.
Monitor how customers respond. If customers regularly show interest but rarely complete purchases, you may need to examine your price alongside other factors such as product presentation, description, trust and delivery.
If a product sells extremely quickly, that may also give you useful information about demand. Use your sales data to make informed adjustments.
15Don't forget the value of good service
Price isn't everything.
Two sellers can offer the same product at similar prices, but customers may choose the seller who communicates clearly, provides accurate information and handles orders professionally.
Your reputation becomes part of the value you offer. Good service can encourage repeat purchases and referrals.
A simple pricing formula
A useful starting point is:
Starting formula
Total Product Cost + Other Selling Costs + Desired Profit = Selling Price
Example: ₦20,000 + ₦2,500 + ₦5,000 = ₦27,500
This is only a starting point. You should also consider the market, your customers, competition, product quality and applicable fees.
Common pricing mistakes to avoid
Watch out for these
If you don't know what the product actually costs you, you cannot accurately calculate your profit.
Low prices can attract attention, but extremely low margins can make your business difficult to sustain.
Packaging, transportation, advertising and transaction costs can reduce your actual profit.
Be clear about delivery charges and other applicable costs.
Their costs and business model may be completely different from yours.
Make pricing decisions based on your costs, market conditions and business goals.
Final thought
A good price isn't necessarily the lowest price.
It's a price that makes sense for your product, your customer and your business.
Know your costs. Understand your market. Calculate your profit. Communicate your prices clearly. And review your pricing as your business changes.
With the right approach, you can build a business that attracts customers while remaining profitable enough to grow.
Sell your products on Salmart
Once you've worked out your pricing, the next step is getting your products in front of potential customers.
Salmart is a Nigerian social-commerce marketplace where sellers can list products and connect with buyers.
Whether you're an individual seller, small business owner, manufacturer or growing brand, you can use Salmart to put your products in front of people looking to buy.
Create your listing, add clear product photos, provide an honest description, set your price and start connecting with customers.
Buy. Sell. Connect. All on Salmart.