Pricing from a competitor's list alone can leave out the costs and margin your business needs to cover. Start with your own costs, then use comparable prices and customer feedback as context.
Calculate a target gross margin
Gross margin is the share of the selling price left after product cost: (selling price − product cost) ÷ selling price. If an item costs KES 1,000 and you want a 20% gross margin, the calculation is KES 1,000 ÷ (1 − 0.20) = KES 1,250. A 20% markup on KES 1,000 would instead give a KES 1,200 price and a 16.7% gross margin. Include other relevant costs when you set a final price.
Include the costs of selling
Depending on how you sell, your costs may also include packaging, delivery, payment-provider charges, rent, or labour. Check current provider rates and account for the costs that apply to your business. Avoid assuming a payment-specific surcharge is allowed; check your provider's terms and applicable requirements first.
Use records to review your prices
Keep product costs and selling prices in your business records, then review them alongside sales and stock activity. SokoWise can help you organize product and inventory information; use the reporting available in your account with your other cost records when reviewing prices. A report is one input to a pricing decision, not a substitute for checking every cost that applies.