How to price your products: costs, competitors and ₹999 endings

To price a product well, start from your full cost per order, not just what you paid for the item. Add packing, delivery you absorb, payment gateway fees, GST and an allowance for returns, then add the margin you need to run and grow the business. Check competitors to see where that puts you, and adjust towards value pricing if your product is genuinely special. Price endings such as ₹499 or ₹999 can help, but they matter far less than getting the base number right.

What should you include in the cost of a product?

Many new sellers price from the purchase cost alone and later wonder where the money went. List every cost that comes with selling one unit online:

Our guide to calculating profit per order goes through this line by line.

How do you calculate a selling price from cost?

The simplest method is cost-plus pricing: total cost plus a margin. But be careful with the maths. Margin is a share of the selling price, not of the cost.

Here's a hypothetical example. Say a cotton kurta costs you ₹450 to buy, and packing, delivery you absorb, payment fees and a returns allowance add ₹150. Your total cost is ₹600. If you want a 40% margin on the price before GST:

• Price before GST = ₹600 ÷ (1 − 0.40) = ₹1,000.
• Adding 40% to cost would give only ₹840, which is a 28.6% margin. That's the common mistake.

Then add GST at the correct rate for your product, if you're registered, and decide whether to show prices GST-inclusive (usual for consumers in India) or with GST on top. See GST-inclusive vs exclusive pricing. Use the free profit margin, discount and GST calculators to check your numbers; no sign-up needed.

How should competitors' prices affect yours?

Look at competitors to understand where you sit, not to copy them. Compare like with like: the same quality, size, materials and service. Then decide your position:

• Below the market: only if your costs are genuinely lower. Competing on price alone is a hard game for a small business.
• At the market: where shoppers will compare on photos, reviews, delivery and service.
• Above the market: when you offer something extra: handmade, better materials, faster local delivery, personal service, a story.

Remember that marketplace prices often include commissions and fees the seller pays, so a direct store can sometimes match them with a better margin. See marketplace vs your own store.

What is value pricing, and when should you use it?

Value pricing sets the price by what the product is worth to the customer, not just what it cost you. It suits products that are unique, handmade, personalised, hard to find or tied to an important occasion. A hand-painted wedding invitation box or a pure silk handloom saree isn't priced like a commodity. Support a higher price with what the buyer can see: close-up photos, the maker's story, materials, time taken and genuine reviews. Our guide to product descriptions that sell helps.

Do ₹99 and ₹999 price endings really work?

Prices ending in 9 or 99, often called charm prices, are widely used because shoppers tend to read the first digit, so ₹999 can feel closer to ₹900 than to ₹1,000. In India they're so common that shoppers expect them for many everyday products. A few practical rules:

• Use charm prices for everyday and value products, where shoppers compare quickly: ₹499, ₹799, ₹1,299.
• Use round prices for premium or gifting products, where a clean ₹2,500 or ₹12,000 can feel more confident.
• Stay consistent across your store so it doesn't look random.
• Watch thresholds: if free delivery starts at ₹999, products priced just below it can nudge shoppers to add something small.
• Don't fake discounts. Showing an inflated "original" price to make a sale look bigger misleads customers, and consumer rules take a dim view of it.

How can bundles and quantity prices raise order value?

Instead of cutting prices, give customers a reason to buy more:

• Bundles: "Three pickles for ₹699" or a gift hamper priced as one item.
• Quantity prices: lower per-unit prices for 3, 6 or 12 units; useful for consumables and return gifts.
• Buy X get Y or a free gift above an order value.
• Spend more, save more tiers, such as ₹100 off above ₹1,500.

UpMinutes includes all of these as built-in offers, plus coupons, and you choose whether coupons can combine with automatic offers. Read coupons and offers that work before you plan your next sale.

How should delivery and COD costs show up in your price?

You have three broad choices, and each sends a different signal:

• Build delivery into the product price and offer free delivery everywhere. Simple for shoppers, but your prices look higher next to competitors who charge delivery separately, and distant orders can eat your margin.
• Charge delivery separately by zone or weight. Product prices look sharper, but some shoppers drop out when they see the delivery fee at checkout.
• Free delivery above an order value, with a charge below it. Often the best balance: small orders pay their way, and the threshold nudges people to add one more item.

Cash on delivery usually costs you more than prepaid, through courier COD fees, slower remittance and refused parcels. Some sellers add a small, clearly shown COD charge; others prefer to reward prepaid orders with a coupon. Either way, account for it in your cost sheet rather than hoping it evens out.

How should you price for customers abroad?

If you sell to customers outside India, your rupee price still has to cover international shipping, which is often far higher than domestic delivery, plus any extra packing. Many sellers keep the same product price and charge international delivery by weight in a separate zone. UpMinutes can show visitors abroad guide prices in up to 12 currencies, such as USD, GBP, AED and SGD, while charging in rupees, so pick rupee prices that convert to sensible-looking amounts in your main markets. See international shipping from India.

When should you raise your prices?

• When your costs rise: materials, courier rates, packaging.
• When a product sells out repeatedly and you can't make more quickly.
• When reviews show customers value it highly.
• When you add something: better packaging, faster delivery, a new finish.

Raise prices in modest steps, ideally on new stock or new collections, and tell regular customers early. Most people understand fair increases from a small business, especially when quality stays the same or improves.

Pricing checklist

• Full cost per order worked out, including fees and returns.
• Margin calculated on the selling price, not the cost.
• GST rate checked and display choice made.
• Competitor range noted and your position decided.
• Price endings consistent with your brand.
• Bundles or quantity prices for products bought in multiples.
• Prices reviewed every few months.

Filed under Products & photos. More guides on the UpMinutes blog.