How to price products for selling online in Pakistan

Most new sellers set their prices the same way. They look at what others charge, knock a little off, and check that the number is comfortably above what the product cost them. Then a busy month arrives, the courier's remittance lands, and somehow there is less money than when the month began.

The problem is rarely the product. It is that the price was checked against two costs, the item and perhaps the delivery, when every online order carries eight. This guide builds a price from all eight, works through an example where a healthy-looking product turns out to lose money, and covers the decisions on top: free delivery, prepaid incentives, crossed-out prices and when to raise prices.

Every cost an order actually carries

Before you pick a number, list what one order costs you, from the moment the buyer places it to the moment the cash is in your account.

• The product, landed. What one unit cost to reach your door: purchase price, inward freight, and any duty or middleman's cut.
• Packaging. Flyer or box, tape, tissue, the thank-you card. Small, never zero; see packaging that survives the courier.
• Delivery out. What your courier charges for that weight to that city, plus any charge for collecting cash.
• Returns. Parcels refused at the door or sent back. You pay delivery both ways and sell nothing.
• Payment fees. Card and wallet gateways charge per transaction; use the rate in your own agreement, not a figure from a blog.
• Marketing. Ads, influencer fees and discount codes, spread across the orders they brought in. A 10% code comes straight out of your margin.
• Fixed costs. Your platform subscription, a packing helper, your phone bill, spread across the month's orders.
• Your time. Packing, answering DMs, confirming orders, trips to the courier. If the numbers only work because your time is free, the business isn't paying you yet.

Sellers almost always price on the first two or three. The rest turn up later, in the courier statement and the ad account, long after the price is on the product page. Before you scale up advertising, know what an order costs you in ads; see Facebook and Instagram ads for a small store.

Divide by the orders you were actually paid for

This is the idea that fixes most pricing mistakes. Add up what a batch of dispatched orders cost you, then divide by the number of those orders that were delivered and paid for.

Price = (cost of a batch of dispatched orders + the profit you want) ÷ the orders in that batch that were paid for

Every refused parcel still used packaging, still paid for delivery out and back, and still cost the ad money that brought it in. It earns nothing, so the orders that do get paid have to carry it. Price each order as if it will certainly be delivered and you have set a price for a business you don't have.

A worked example: profitable on paper, a loss in practice

Every number below is invented to show the arithmetic. None of them is a real courier rate, return rate or advertising cost, so replace each one with your own.

Say you sell a printed cotton kurta. It costs you Rs 1,200 landed, packaging is Rs 60, your courier charges Rs 250 to deliver it, and a refused parcel costs another Rs 250 to come back. You price it at Rs 2,000 with free delivery.

On paper: Rs 2,000 − Rs 1,200 − Rs 60 − Rs 250 leaves Rs 490 profit per order. A healthy product.

Now take ten real orders. You spent Rs 3,000 on ads to get them, all ten are Cash on Delivery, and two buyers refuse the parcel. To keep it kind, both kurtas come back undamaged and go back on the shelf.

Ten orders, a day of packing, and you paid Rs 200 for the privilege, before counting a rupee for your time. This is the gentle version, too: no damaged stock, no lost parcel, no discount code. A 10% code on those eight sales would have cost another Rs 1,600.

Now run the formula. The batch cost Rs 16,200. Say you want Rs 400 profit on each delivered kurta, Rs 3,200 in all: (Rs 16,200 + Rs 3,200) ÷ 8 = Rs 2,425. Break-even alone is Rs 16,200 ÷ 8 = Rs 2,025, so at Rs 2,000 every batch was losing money before you paid yourself anything.

The other lever is the refusal rate. Keep the price at Rs 2,000 but get refusals down from two in ten to one in ten, and the same batch moves from a Rs 200 loss to an Rs 850 profit: one more kurta paid for, one fewer trip back. That is why confirming Cash on Delivery orders before dispatch is a pricing decision as much as an operational one; see how to reduce COD returns.

Free delivery, or charge for it

Delivery gets paid for somewhere: either inside the price, as free delivery, or as a separate charge at checkout.

Free delivery shows the buyer one number and adds nothing at the last step. The catch is that your product looks dearer beside a competitor who adds delivery at checkout, and that you absorb your most expensive destinations too, so price for your real mix of cities, not your nearest one.

A delivery charge keeps the headline price lower and makes every order pay its own way. The risk is surprise: a fee that first appears at checkout feels like a trick, and surprises at the payment step lose orders.

Free delivery above a threshold is often the best of both. Set it a little above your typical single-item order so it nudges a second item into the same parcel; that item adds its own cost but little or no extra delivery.

Whichever you pick, show delivery on the product page, and remember that a refused COD parcel costs you freight both ways regardless, because the buyer never paid the delivery charge either.

On Storecrafto, shipping rates can be flat, by weight or by order value, per zone, and a free-delivery threshold can run as a cart incentive that shows shoppers how much more to add; see shipping zones and cart incentives. Still choosing who delivers? Compare couriers on coverage and remittance speed before price: choosing a courier.

Pricing to move buyers to prepaid

Every buyer who pays upfront takes one refusal risk off your books, and that risk has a price you can work out. In the example, a refused parcel costs Rs 560 in packaging and freight, plus the Rs 300 of ads that bought it. With two in ten refused, every COD order carries about Rs 170 of that loss on average.

That number is the ceiling on what a prepaid incentive is worth. Offer less than that, after your gateway's fee on the prepaid order, and it pays for itself. Offer more and it is simply a discount.

• Use a fixed amount, not a percentage. The refusal cost doesn't grow with the basket, so a percentage overpays on large orders.
• Free delivery on prepaid orders is easy for buyers to understand and easy for you to cost.
• Frame it as a reward for paying online, not a penalty for COD. Buyers who want Cash on Delivery should still feel welcome.
• Make sure only prepaid orders can claim it. A code that also works with Cash on Delivery is not a prepaid incentive; it is a discount with a misleading name.

An incentive only moves people who have a prepaid method they trust; see accepting EasyPaisa, accepting card payments and taking bank transfers safely.

Crossed-out prices, done honestly

A compare-at price, the old price struck through beside the new one, is a claim: this used to cost more. It works when it is true and costs you when it is not.

• Only show a price you actually charged, for a real stretch of time, never one invented to make the discount look bigger.
• End your sales. A crossed-out price that never goes away teaches buyers that the sale price is the real price, and that waiting pays.
• Remember your repeat buyers. The person who paid Rs 2,000 last month will notice today's "was Rs 3,500".
• Check the margin at the sale price. The formula above applies to the number buyers actually pay, not the one you crossed out.

A bigger basket is often a better lever than a discount: bundles and spend tiers spread packaging and delivery over more rupees, while a straight discount only shrinks the margin on the same parcel.

On Storecrafto the compare-at price is an optional field on each product, shown crossed out beside the price, and the cost per item is private, so you can see each product's margin without buyers ever seeing it; see adding a product. Codes, spend tiers and bundles are under discounts and promotions.

When to raise your prices

A price that sells is tempting to leave alone. These are the signs it is time to move it:

• Your costs went up, whether supplier, courier or packaging, and you have been absorbing it.
• You sell out faster than you can restock.
• You are busy every day and the monthly numbers stay flat.
• Nobody pushes back on the price, or buyers remark on how cheap it is.
• Your monthly review shows a product under the margin you set for it.

The arithmetic is kinder than it feels. Say a product earns you Rs 200 per delivered order, another invented figure. Raise the price by Rs 100 and each order earns Rs 300. You could lose a third of those orders and make exactly the same profit, with a third less packing, fewer refusals to absorb and less cash tied up in stock.

Raise in steps, one product at a time, and watch its orders for a few weeks before touching the next. New stock, a new colour or a new collection is a natural moment. Never change the price of an order already placed, and don't apologise for it in the caption; the new price is simply the price.

Review your margins every month

The price you set was built on guesses about freight, refusals and ad costs. Once a month, replace the guesses with what actually happened:

1. List last month's orders: dispatched, delivered, refused, cancelled and refunded.
2. Get your courier's statement: what you were charged for delivery and returns, and how much cash was remitted.
3. Add up ad spend, discounts given, packaging bought and fixed costs.
4. Work out profit per delivered order, per product if you can, using the formula above.
5. Compare that with the numbers your price was built on, and change one thing where they differ.

Your sales dashboard tells you what you sold; the courier statement and your bank account tell you what arrived. Reconcile the two every month, because the gap between them is where margin goes missing.

On Storecrafto, analytics shows sales net of refunds, your top products and where buyers drop out of the funnel, and the cost per item on each product keeps its margin in view. For the wider picture of starting out, see how to sell online in Pakistan.

The short version

• Count every cost: product, packaging, delivery out, returns, payment fees, marketing, fixed costs and your time.
• Divide a batch's costs by the orders that were paid for, not the orders that were placed.
• A product showing Rs 490 profit per order on paper can lose money across ten real ones.
• Cutting refusals can matter as much as raising the price, so confirm COD orders before dispatch.
• Free delivery is a pricing decision, and you pay freight both ways on a refused parcel either way.
• A prepaid incentive is worth up to what an average refusal costs you, and only if COD orders can't claim it.
• Show compare-at prices only for prices you really charged, and end your sales.
• Raise prices when costs rise or you are busy without profit; you can lose some orders and earn the same.
• Review real margins monthly against the courier statement, not just the sales dashboard.