--- title: How to Price a Shopify Product: A Step-by-Step Guide description: A guide for Shopify merchants on pricing products. Learn to calculate costs, determine profit margins, and select from pricing strategies like cost-plus canonical: https://actorly.app/blog/how-to-work-out-the-right-price-for-a-shopify-product --- [← Blog](https://actorly.app/blog) [Pricing, discounts and sales](https://actorly.app/blog/category/pricing-and-discounts) # How to work out the right price for a Shopify product Learn the formulas to calculate your product costs, set a profitable selling price, and choose the right pricing strategy for your brand without [Odera Joseph Echendu](https://actorly.app/authors/odera-joseph-echendu) Oct 18, 2026 9 min read Pricing a product involves adding up all your costs to find a cost per unit, then adding a profit margin to set the final selling price. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) A good price covers your expenses, helps you stay competitive, and communicates your product's value to customers. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies), How to Price a Product in 2026 (+ Pricing Calculator)) This process is a balance between your costs, what customers are willing to pay, and how competitors have priced similar items. ## Key takeaways - To set a profitable price, you must first calculate your total cost per unit by adding all fixed and variable costs, including often missed expenses like shipping and import duties. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product), Strategic Review: Shopify Cost of Goods Sold (COGS) as a Profit Lever) - Choose a pricing strategy that aligns with your brand and market position, such as a simple cost-plus model, a value-based approach for unique products, or a competitive strategy for crowded markets. - Pricing is not a one time task. Regularly review your costs and prices to adapt to market changes, supplier price shifts, and new platform fees to protect your profit margins. (How to Price a Product in 2026 (+ Pricing Calculator), Strategic Review: Shopify Cost of Goods Sold (COGS) as a Profit Lever) ## How do I calculate the cost of a product? To find a profitable price, you first need to know your cost per unit. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Start by choosing a consistent time period, like a month or quarter, and add up all your business expenses. These include fixed costs that do not change with production volume, such as rent and salaries, and variable costs that do, like raw materials and shipping fees. (How to Price a Product in 2026 (+ Pricing Calculator), Strategic Review: Shopify Cost of Goods Sold (COGS) as a Profit Lever) If you source products or sell to customers abroad, include international expenses like tariffs and duties. Finally, use this formula to find your cost per unit: (Total fixed costs + Total variable costs) / Number of units produced = Cost per unit. ## How do I add a profit margin to find the selling price? Once you know your cost per unit, you can set a selling price that includes your desired profit margin. A profit margin is the percentage of the selling price that is profit. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) To calculate your price, use the following formula. Target price = (Cost per unit) / (1 - Desired profit margin as a decimal) ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) For example, if your cost of goods sold (COGS) is $20 and you want a 50% profit margin, the calculation is $20 / (1 - 0.5) = $40. According to [Webgility](https://www.webgility.com/blog/shopify-cost-of-goods-sold), your minimum selling price would be $40. Profit margins vary widely by industry. One study from New York University reported the following averages: IndustryAverage Gross Profit Margin Apparel56.88% ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Electronics38.77% ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) General Retail33.18% ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Furniture and Home Furnishings30.28% ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Food and Grocery26.31% ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Source: [How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product) These figures can serve as a starting point, but your final margin should also consider your brand positioning and what your competitors are charging. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) ## What are the main pricing strategies? A pricing strategy is the method you use to set prices for your products. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies)) The right approach depends on your products, your market, and your business goals. Some strategies focus on covering costs, while others are based on market competition or the perceived value of your items. Here are some of the most common pricing strategies: StrategyBest forProsCons **Cost-Plus** Businesses with predictable costs, like manufacturers or wholesalers. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies))Simple to calculate and provides consistent margins. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator))Does not account for customer demand or competitor pricing. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator)) **Competitive** Commoditized products in crowded markets. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies))Easy to benchmark against competitors.Can lead to thin margins and makes it hard to differentiate on value. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator)) **Value-Based** Unique or premium products that stand out from the competition. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies))Allows for higher margins and builds a strong brand. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator))It can be difficult to quantify perceived value without customer research. **Premium** Luxury or exclusive brands where a high price is part of the appeal. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies), How to Price a Product in 2026 (+ Pricing Calculator))Generates high profit margins and reinforces a prestigious brand image. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator))Limits your audience to customers who can afford higher prices. **Penetration** New brands entering a competitive market. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies), How to Price a Product in 2026 (+ Pricing Calculator))Helps acquire customers quickly and build market share. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator))It can be difficult to raise prices later without losing customers. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator)) **Price Skimming** Innovative, new-to-market products with high demand. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies), How to Price a Product in 2026 (+ Pricing Calculator))Maximizes revenue from early adopters and helps recoup development costs. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator))Can attract competitors and disappoint early buyers when prices drop. (Pricing Strategy Guide: 10 Types and Examples (2026), How to Price a Product in 2026 (+ Pricing Calculator)) Source: [Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies), [How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product) To choose the right strategy, you need to understand your business's place in the market. Start by identifying your target audience and analyzing your competitors' prices to understand what customers expect to pay. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Then, define your unique value proposition (UVP), which is what makes your product a better choice than others. Your UVP determines your market positioning, whether you focus on affordability, quality, or convenience. Your pricing strategy should align with this positioning. ## Common mistakes when pricing products Here are some common mistakes to avoid. ## How can I test different prices in Shopify? Testing different prices helps you understand what customers are willing to pay and what offers drive the most sales. Shopify has features that let you experiment with your pricing. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies)) One way to run a temporary sale is by using the **Compare-at price** field on the product page. Enter the product's original price into the Compare-at price field and the new, lower sale price into the Price field. ([The page on sale pricing](https://help.shopify.com/en/manual/products/details/product-pricing/sale-pricing)) Many themes will then display the sale price to customers alongside the original price. You can also create and manage discounts from the Discounts section of your Shopify admin. (shopify) This allows you to set up discount codes for a percentage off, a fixed amount, or other offers to test how a lower price affects sales volume. (shopify) For more advanced testing, some merchants use A/B testing to experiment with different price points and offers to see what drives the most conversions. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies)) This involves showing different prices to different groups of visitors to see which one performs better. ## Frequently asked questions ### How do I show a sale price on a Shopify product? To display a sale price, go to the product's page in your Shopify admin. Enter the original price into the **Compare-at price** field and the new sale price into the **Price** field. ([The page on sale pricing](https://help.shopify.com/en/manual/products/details/product-pricing/sale-pricing)) Your theme will then show the lower price as the current price. ### What is the difference between profit margin and markup? Markup is the percentage you add to your product's cost to determine its selling price. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) Profit margin is the percentage of the final selling price that is left after subtracting the product's cost. They are calculated with different formulas and are not the same thing. ### How often should I review my product prices? It is good practice to review your product costs and prices regularly, such as monthly or whenever you receive a new batch of inventory. Costs for materials, shipping, and fees can change, so updating your prices ensures your profit margins remain accurate. ([How to Price a Product in 2026 \(+ Pricing Calculator\)](https://www.shopify.com/blog/how-to-price-your-product)) ### What is a value-based pricing strategy? Value-based pricing sets prices based on how much customers believe a product is worth, rather than what it costs to produce. ([Pricing Strategy Guide: 10 Types and Examples \(2026\)](https://www.shopify.com/blog/pricing-strategies)) This strategy works best for unique or highly differentiated products where customers are willing to pay more for perceived value, such as higher quality, convenience, or brand status. ## Read next - [Does Shopify keep a history of product changes?](https://actorly.app/blog/does-shopify-keep-a-history-of-product-changes) Written by [Odera Joseph Echendu](https://actorly.app/authors/odera-joseph-echendu) Founder of Actorly Odera Joseph Echendu is the founder of Actorly, a Shopify app from ONDUTYOPS LLC that keeps a searchable history of the changes it can see in a store. He spent seven years leading customer support and technical support inside high-growth SaaS and e-commerce companies. [All posts by Odera Joseph Echendu](https://actorly.app/authors/odera-joseph-echendu) ## More in [Pricing, discounts and sales](https://actorly.app/blog/category/pricing-and-discounts) [Why did my Shopify discount stop working?:](https://actorly.app/blog/why-did-my-shopify-discount-stop-working) ## Keep reading [Comparisons Shopify or WooCommerce: which fits a small store?:](https://actorly.app/blog/shopify-or-woocommerce-which-fits-a-small-store)[Privacy and compliance How to handle a GDPR data request on Shopify:](https://actorly.app/blog/how-to-handle-a-gdpr-data-request-on-shopify)[Privacy and compliance Shopify's EU Omnibus price history vs your change history:](https://actorly.app/blog/shopify-eu-omnibus-price-history-vs-your-change-history)