Many sellers price by copying competitors and discover months later they've been losing money. A step-by-step pricing formula that includes courier, COD, returns, ads and platform costs.
"Everyone sells it for ৳990, so I'll sell it for ৳950." That's how many online sellers set prices, and it's why many busy-looking shops make little or no profit. Competitor prices matter, but they don't tell you your costs. This guide gives you a formula to find your real cost per order and a price that leaves profit.
All numbers below are examples. Replace them with your own.
Step 1: List every cost per order
Product cost (landed cost)
Not just the purchase price. Include transport from the wholesaler, import duties if any, and alteration or labelling. If you buy a kurti for ৳450 and spend ৳30 bringing it to your home, the landed cost is ৳480.
Packaging
Courier poly, inner bag, tape, invoice print, thank-you card. Example: ৳20.
Delivery cost you absorb
If the courier charges you ৳70 inside Dhaka and you charge the customer ৳60, you absorb ৳10. If you offer free delivery, you absorb all of it.
COD charge
Couriers often charge a percentage of the COD amount. Check your courier's current terms. Example: 1% of ৳1,200 = ৳12.
Online payment fees
If customers pay via SSLCommerz, the gateway's fee applies per your merchant agreement.
Return cost
Some parcels come back. You pay delivery (and often return charges) and get nothing. If 10% of parcels return and each return costs you ৳120, that's ৳12 per successful order on average (120 × 10% ÷ 90% ≈ ৳13). Use your own return rate.
Advertising cost per order
Monthly ad spend ÷ orders from ads. If you spend ৳15,000 and get 100 orders, that's ৳150 per order. This is often the biggest hidden cost.
Platform and tools
Your store subscription (see the pricing page), SMS gateway credit and domain renewal, spread across your monthly orders. Example: ৳3,000 a month ÷ 150 orders = ৳20 per order.
Step 2: Add it up
| Cost | Example | |---|---| | Landed product cost | ৳480 | | Packaging | ৳20 | | Delivery absorbed | ৳10 | | COD fee | ৳12 | | Return cost share | ৳13 | | Ad cost per order | ৳150 | | Platform/tools per order | ৳20 | | Total cost per order | ৳705 |
If you sell this kurti for ৳950, profit is ৳245, or about 26% of the price. If you sell for ৳790 to undercut competitors, profit drops to ৳85, and one extra return wipes out several orders' profit.
Step 3: Decide your target margin
A practical approach:
Price = Total cost ÷ (1 − target margin)
For a 30% margin: ৳705 ÷ 0.70 ≈ ৳1,007. Round to a natural price such as ৳990 or ৳1,050, depending on the market.
Why a margin and not a fixed markup? Because discounts, coupons and price changes are easier to judge when you think in margin.
Step 4: Check the market
Now look at competitors:
- If your price is much higher, can you justify it with better quality, photos, service, faster delivery or a brand story? If not, reduce costs (cheaper sourcing, lower ad cost per order) rather than cutting margin.
- If your price is lower, you may be leaving money on the table.
- If everyone sells below your cost, they may be using lower quality, ignoring costs, or about to go out of business. Don't follow them down.
Step 5: Plan for discounts
If you'll run sales, build room for them. A product priced at a 30% margin can handle a 10% discount; at 15% it can't. On Pro and Elite, the Marketing plugin adds coupons and flash sales; calculate margin before each offer.
Step 6: Use bundles and thresholds
- Bundles (two T-shirts, or a charger plus cable) raise the order value while spreading fixed costs like delivery and packaging.
- Free delivery above a threshold encourages bigger carts. Set the threshold where the margin covers delivery.
Step 7: Review monthly
Costs change: courier rates, ad costs, return rates. Once a month:
- Check Reports → Sales and Reports → Products for what sold.
- Recalculate ad cost per order.
- Check your return rate (Orders → Returns).
- Adjust prices or costs accordingly.
Pricing psychology (used honestly)
- Prices ending in 90 or 50 (৳990, ৳1,250) feel natural to Bangladeshi shoppers.
- Show the delivery charge clearly; hidden costs feel worse than higher prices.
- Never invent a fake "original price" to show a bigger discount.
Quick worksheet
For each product, fill in:
- Landed cost: ___
- Packaging: ___
- Delivery absorbed: ___
- COD/payment fees: ___
- Return cost share: ___
- Ad cost per order: ___
- Platform/tools per order: ___
- Total: ___
- Target margin: ___%
- Price = Total ÷ (1 − margin): ___
Summary
Know your full cost per order, especially ads and returns, set prices from a target margin, then check the market. Review monthly. A slightly higher price with real profit beats a busy shop that loses money on every parcel.