Pricing strategies for profitability

Many Kenyan small business owners price their products using guesswork. They check what competitors charge, add a small markup, and hope for the best. This approach leaves money on the table or, worse, results in selling at a loss.

Simple Pricing Math: Cost + Margin = Price

Every product has a cost price: what you paid to acquire it. Your selling price must cover that cost plus your desired profit margin. If a packet of rice costs you KES 1,000 and you want a 20% margin, your selling price is KES 1,200. The formula is: selling price = cost / (1 - desired margin).

Accounting for M-PESA Fees

M-PESA transaction fees eat into your profit on every digital payment. If you charge KES 1,200 and the customer pays via M-PESA, you might receive KES 1,185 after fees. On high volumes, these small deductions add up. Build M-PESA fees into your pricing by adding a small offset, or set different prices for cash and card payments.

How SokoWise Tracks Profitability Per Product

SokoWise lets you record the cost price for every product alongside your selling price. Your profit dashboard shows the margin on each sale, each product, and across your entire business. You can see exactly which products give you the highest profit, not just the highest revenue. This data helps you decide what to promote and what to discount without losing money.