How to set a selling price before launch

A good price is not simply “cost plus something.” It needs to cover the costs you chose, fit the customer’s context and leave room for normal business friction.

1. Define the cost you are trying to recover

List direct product or delivery cost first. Then decide how you will treat packaging, fulfilment, payment fees, commission, returns, labour and a share of fixed costs. A price decision is only as good as the cost definition behind it.

2. Choose a target margin, not a vague uplift

If you want a 35% margin, the price formula is cost ÷ (1 − 0.35). That is different from adding 35% markup to cost. Use a calculator so the target remains consistent across products.

Example: If the relevant cost is ₹650 and the target margin is 35%, the planning price is ₹650 ÷ 0.65 = ₹1,000. Adding a 35% markup would produce ₹877.50 and only about a 25.9% margin.

3. Stress-test the price

Ask what happens if the customer receives a 10% discount, shipping rises, a marketplace fee applies or one in ten orders is returned. Test the price at a realistic rather than best-case cost. For services, test how much non-billable time and revision work the quote needs to support.

4. Separate tax from margin thinking

Decide whether customer-facing prices are shown GST-inclusive or exclusive, then use that convention consistently. Your commercial margin model should also state whether its cost and revenue inputs are before or after tax. If you are uncertain about GST treatment, take tax advice before publishing prices.

Use the Pricing CalculatorUnderstand margin vs markup

Sources and further reading

Use your actual costs and professional advice for material pricing or tax decisions.