How to Price Products for Profit in Kenya (2026): Markup, Margin and Worked Examples

Oct 19, 2026

Buy More Mall Kenya

Many small businesses are busy but broke because their prices only cover the buying price. Rent, transport, M-Pesa charges, packaging and your own time quietly eat the profit. Pricing well is the fastest way to earn more without selling more.

Quick answer: Add up the full cost per item (buying price + transport + packaging + payment and platform charges + a share of rent and wages), decide the margin you need, then use Price = Cost ÷ (1 − margin). Example: a full cost of KSh 700 and a 30% margin gives 700 ÷ 0.70 = KSh 1,000. Check the result against what buyers will pay for your quality and service.

Step 1: Find Your Full Cost per Item

Cost	Example per item (KSh)
Buying or making cost	500
Transport to your shop	40
Packaging	30
M-Pesa and platform charges	40
Share of rent, power, wages, adverts	90
Full cost	700

Illustrative numbers. Use your own records.

Step 2: Markup vs Margin (Not the Same)

	Markup	Margin
Based on	Cost	Selling price
Formula	(Price − Cost) ÷ Cost	(Price − Cost) ÷ Price
Cost 700, price 1,000	43%	30%

Adding "30% on cost" (markup) gives a smaller profit than a 30% margin. Decide which one you mean, and use margin to compare with your expenses.

Step 3: Use the Pricing Formula

Full cost	Margin wanted	Price = Cost ÷ (1 − margin)
700	20%	875
700	30%	1,000
700	40%	1,167
1,500	25%	2,000

Step 4: Check the Market and Your Value

Look at what similar products sell for, then decide where you stand. You do not have to be the cheapest: buyers pay more for faster delivery, warranty, better photos, honest advice and quick replies. If you are far above the market, look for costs to cut before cutting the price.

Retail vs Wholesale Prices

Wholesale buyers take quantity and expect a lower unit price. Set a minimum quantity and price tiers so every tier still clears your full cost. On Buy More Mall you can list retail and wholesale prices, or let buyers ask for a wholesale quote.

Do Not Forget Delivery

Either add delivery to the price (and say "free delivery") or charge it separately and show it early. Surprise charges at checkout lose buyers. See how to deliver online orders.

Worked Example: Pricing a Dress

A boutique buys a dress for KSh 900. Transport, a branded bag, M-Pesa charges and a share of rent add KSh 250, so the full cost is KSh 1,150. For a 35% margin: 1,150 ÷ 0.65 = KSh 1,770, rounded to KSh 1,800. The owner checks similar dresses and is in range.

Common Mistakes to Avoid

Pricing on buying cost alone.
Confusing markup with margin.
Discounting below full cost.
Forgetting M-Pesa and delivery charges.
Never reviewing prices when costs rise.

Frequently Asked Questions

How do I price a product for profit?

Work out the full cost per item, choose a margin, and use Price = Cost ÷ (1 − margin); then sanity-check against the market.

What is a good profit margin for a small business in Kenya?

It varies by trade; fast-moving goods run on thin margins, specialist and handmade items on higher ones. Make sure the margin covers all your monthly costs.