Pricing mistakes are quiet — a store can look busy, with orders coming in steadily, and still be barely profitable or even losing money, simply because the price didn't account for every real cost. Getting this right matters just as much as picking a good product.
Start with your true product cost
This includes what you actually paid your supplier, plus any packaging materials. If you're dropshipping, this is your supplier's price per unit including anything they charge for getting it to you.
Add delivery costs
Whether delivery is charged to the customer or absorbed into your price, it's a real cost that needs to be accounted for in your margin calculation — don't treat it as separate from your product economics.
Build in a buffer for refused orders
This is the step many new merchants skip, and it's the one that hurts the most. In a cash-on-delivery market, a percentage of orders will be refused at the door, and you'll have paid for shipping there and back with nothing to show for it. Your pricing needs to absorb this rate across your total sales, not just your successful ones — see our guide to reducing refusals for how to bring this number down.
Factor in advertising spend, if you're running ads
If you're paying for traffic, your price needs to leave room for that cost per sale too — otherwise you can end up with a product that "sells" but never actually turns a profit once ad spend is subtracted.
A simple way to think about your margin
Add up your product cost, delivery cost, a realistic refusal-rate buffer, and any ad spend per sale. What's left after subtracting all of that from your selling price is your real margin — not the difference between your supplier cost and your listed price, which is the number that misleads a lot of new sellers.
Don't just copy competitor prices
A competitor's price tells you nothing about their costs, their supplier deal, or whether they're actually profitable at that price. Price based on your own real numbers, then adjust based on how the market responds — not the other way around.
Conclusion
Profitable pricing in cash-on-delivery ecommerce means accounting for every real cost — product, delivery, refused orders, and ads — not just the number your supplier charged you. Get this calculation right once, and it becomes second nature for every product you add afterward.