Pricing when you're just starting

Almost every new founder makes the same pricing mistake at least once: pricing too low, out of a fear that a higher number will scare customers away. It comes from a reasonable instinct - wanting to be accessible, wanting the first few sales to actually happen - but it usually backfires in ways that are not obvious until months later, when the margin needed to sustain the business simply is not there.

Start with your actual costs, honestly counted

Before thinking about what competitors charge or what feels "fair," it helps to add up every real cost involved in making and delivering a single unit: raw material, your own time valued honestly rather than at zero, packaging, and a reasonable share of shipping and payment processing costs. Many new founders skip valuing their own time in this calculation, which quietly means the business is subsidised by unpaid labour rather than being genuinely profitable.

Once this true cost is clear, a price needs to sit meaningfully above it, not just slightly above it, because a thin margin leaves no room for the returns, refused COD deliveries, or occasional discounts that are a normal part of running any small brand - see returns and RTO: what nobody tells you.

A low price often signals the wrong thing

It is counterintuitive, but a price that is too low can actively hurt sales rather than help them, because customers unconsciously use price as one signal of quality, especially for products like jewellery, skincare or decor where they cannot physically inspect the item before buying. A price that seems too good to be true for the described quality can trigger hesitation rather than eagerness, the opposite of what an underpricing founder intended.

Avoid pricing entirely against marketplace listings

If you have sold on a marketplace before moving to your own store, it is easy to carry over that pricing out of habit, without realising it was shaped by a very different context - side-by-side comparison with unrelated sellers, and a commission eating into your margin. This is worth revisiting deliberately rather than assuming your marketplace price is automatically the right one for your own store, a point explored more fully in price anchoring for small Indian brands.

Raising a price later is harder than starting right

Once customers, especially early repeat customers, get used to a certain price, raising it later can feel like a breach of trust even if the original price was never sustainable. It is far easier, both practically and emotionally, to start with a price that reflects real costs and a fair margin than to underprice out of eagerness and have to raise prices once the business realises it cannot survive otherwise.

A simple, honest pricing approach for a new brand

1. Calculate your true cost per unit, including your own time at a rate you would actually accept.
2. Decide on a margin that leaves room for occasional returns, refused COD orders, and slow months, rather than the thinnest margin that technically breaks even.
3. Compare the resulting price to what feels reasonable for the quality and story of your specific product, adjusting only if there is a clear mismatch, not out of fear alone.
4. Resist matching a lower marketplace price purely out of habit if your own store customers are not being shown that comparison anyway.

Discounts still have a place, used deliberately

None of this means discounts or introductory offers are wrong - a limited-time offer for your very first customers, or a modest discount tied to a specific festive drop, can work well when used deliberately and sparingly. The distinction is between a considered promotional price used occasionally, and a permanently underpriced product used out of ongoing fear that nobody will buy otherwise.

A practical next step

Before your next product launch, work through the true cost calculation above honestly, including your own time, and compare the resulting number to whatever price you were about to set out of instinct. If the instinctive price is noticeably lower, it is worth examining whether that instinct is protecting the sale or quietly undermining the business. A store of your own, where pricing is not constrained by side-by-side marketplace comparison, gives you the room to price this way - early access is a good place to start.