How to price products on Shopify?

Price for profit, not just sales. Factor in COGS, shipping, marketing costs, and your desired margin to set sustainable prices.

Product Pricing Strategy

The Pricing Formula

Price = (COGS + Shipping + Marketing) × Margin Multiplier

Common Pricing Strategies

  • Cost-plus: Add a fixed markup to your costs
  • Value-based: Price based on perceived value
  • Competitive: Match or undercut competitors
  • Premium: Price high, justify with branding

Margin Targets

  • Dropshipping: 30–50%
  • Private label: 60–80%
  • Handmade: 70–90%

Tips

  • Always include marketing costs in your calculations
  • Test different price points
  • Use psychological pricing ($29.99 vs $30)