Most shops price the same way: copy the neighbour, or add a round number on top of cost. It feels safe, but it's guessing — and guessing is how you end up busy all month with little profit to show for it.

Pricing for profit isn't complicated. Here's a simple, repeatable method, plus a free tool that does the maths.

Start with the two numbers that matter

Every price decision comes from two figures:

  • Cost price — what you actually pay for the item (including transport, if you can).
  • Selling price — what you charge the customer.

The gap between them is your profit per item. Buy sugar at 2,000 and sell at 2,500, and you make 500 per unit. Simple — but the percentage behind it is where shops get confused.

Margin vs. markup — know the difference

These two get mixed up constantly, and it costs money:

  • Markup is profit as a share of your cost. 500 profit on a 2,000 cost is a 25% markup.
  • Margin is profit as a share of your selling price. That same 500 profit on a 2,500 sale is a 20% margin.

Same shilling, two different percentages. Margin is the one to plan with, because it tells you what share of every sale you actually keep — and it's what you compare across products.

Choose a target margin, then work backwards

Instead of guessing a price, decide the margin you want and calculate the price:

Selling price = Cost ÷ (1 − margin)

Want a 30% margin on an item that costs 2,000? 2,000 ÷ (1 − 0.30) = 2,000 ÷ 0.70 = 2,857 → round to 2,900 or 3,000.

You don't need to do this by hand. Our free Shop Profit Calculator does it instantly — enter your cost and a target margin, and it gives you the selling price (and shows your profit, margin and markup as you type).

Match the margin to the product

Not everything should carry the same margin:

  • Fast-moving basics (sugar, rice, airtime) — thin margins, high volume. Small margin × many sales still adds up.
  • Slow, considered buys (cosmetics, hardware, electronics) — higher margins; customers don't buy them daily, so each sale must earn more.
  • Perishables — price to sell before they expire; a smaller margin beats a total loss.

Know your fast and slow movers, and you can set margins that fit each — which is far easier when your system already shows you what sells.

Round like a shopkeeper, not a calculator

A price of 2,857 looks odd and slows people down. Round to a clean, cash-friendly number (2,900 or 3,000). In a cash economy, prices that make change easy get chosen faster.

Review your prices — costs move

Set-and-forget pricing quietly kills margins when supplier costs rise. Check your key products every month or two: if cost went up and price didn't, your margin shrank without you noticing. This is where reports earn their keep — they show margin by product, so you catch the squeeze early.

Let your system carry the numbers

Once you've set prices, you shouldn't be recalculating profit by hand. A POS that stores cost and selling price on every product shows real profit per product, per category and per day automatically — so pricing becomes a decision, not a monthly headache. (New to choosing one? Start with our POS buyer's guide.)

POSify Pro tracks cost, price and profit on every sale, flags your best and worst performers, and keeps working offline. See how it fits your trade — retail, pharmacies, restaurants or wholesale.

Price with confidence. Use the free profit calculator, then try POSify Pro free to see your real margins on every sale.