Learning how to price products for online selling in Kenya begins with evidence, not a random amount added to the supplier's price. A KSh 300 or KSh 5,000 markup may work for one item and lose money on another. The correct price must cover the item, transport, selling work, channel costs and reasonable risk while leaving a profit customers can understand.

This guide presents a simple pricing worksheet. It is not tax or financial advice, and it does not tell every business to use the same margin. Use your own invoices, operating records and current marketplace terms.

Calculate the landed unit cost first

The supplier price is only one part of the cost. Landed unit cost is what one sellable unit has cost by the time it reaches your stock location and is ready for sale.

Include costs that can be supported by records:

• supplier invoice price;
• transport from supplier to your premises;
• import duty, taxes or clearing charges where genuinely applicable;
• currency conversion and transfer charges for imported stock;
• inspection, testing or repair needed before sale;
• labels or packaging needed to make the unit sellable;
• unavoidable loss from damaged or missing units.

Allocate a shared cost consistently. If transport for 20 identical items was KSh 2,000, the starting allocation is KSh 100 per unit. If the shipment contains different weights or values, a weighted method may be more accurate. Keep the calculation with the purchase record.

Do not use a foreign sponsored-ad price as your cost. It may exclude tax, international shipping, minimum order quantities, duties and local warranty support.

Add operating cost per order

Online selling consumes time and resources even when the product is already in stock. Estimate a reasonable allocation for:

• customer messages and order confirmation;
• product photography and listing maintenance;
• rent, utilities, internet and software;
• picking, testing and packing;
• packaging materials;
• bookkeeping and customer support;
• wages or owner labour;
• expected warranty or return handling.

The allocation does not need to be perfect on day one. Start with monthly operating costs related to selling, divide them by a realistic number of completed orders, then review the result using actual data. Dividing by enquiries instead of completed orders usually understates the cost.

Add only the channel charges that apply

A channel may use monthly rent, commission, listing fees, payment processing or paid promotion. Convert fixed channel charges into a per-order estimate using low, expected and strong sales scenarios.

Under JAAT's current payment policy, normal shops collect buyer payments directly, while protected checkout is optional for eligible orders and may involve commission or processing charges. Price the actual mode offered for the listing. Do not add a protected-checkout fee to every order if most buyers pay the shop directly.

Keep delivery separate unless your advertised price explicitly includes a defined delivery method and zone. A Nairobi pickup price should not quietly subsidise an unknown long-distance shipment.

Understand markup and margin

Markup and profit margin are related but not identical.

Markup percentage = profit divided by cost, multiplied by 100.

Gross margin percentage = profit divided by selling price, multiplied by 100.

If an item costs KSh 1,000 in total and is sold at KSh 1,500, the gross profit before any omitted costs is KSh 500. That is a 50 percent markup on cost but about a 33.3 percent gross margin on the selling price. Confusing the two can produce a lower profit than intended.

Use “total unit cost” in the calculation, not merely the supplier price. If the order will incur a percentage-based fee, a spreadsheet should calculate that fee from the proposed selling price and check the result iteratively.

Build three price floors

A practical worksheet can show three figures:

1. Break-even floor: landed cost plus operating and unavoidable order costs. Selling below this loses money before profit.
2. Normal selling price: the break-even amount plus the target profit required to sustain the business.
3. Promotion floor: the lowest temporary price the business has approved, with dates and quantity limits.

Keep management approval for discounts. A salesperson should not negotiate below the promotion floor merely to close an order. For clearance stock, record why the price is lower, such as discontinued packaging or a disclosed cosmetic defect.

Check the market without copying it blindly

Compare the exact model, capacity, condition, included accessories, warranty and delivery basis. Two listings that look similar can have different plugs, generations, licences or after-sales terms.

Jiji's current posting rules ask sellers to use precise titles, truthful descriptions and prices that correspond to actual similar products. That is a useful reminder, but market comparison is not permission to copy a competitor's image or description.

Record at least three genuinely comparable offers and the date checked. Note whether each price is promotional, out of stock, wholesale-only, tax-exclusive or tied to an overseas minimum order. Use the comparison to test your assumptions. Do not sell below cost simply because one unverifiable advert shows a very low figure.

Treat tax carefully

Tax depends on the seller's registration, turnover, supplies and circumstances. KRA's VAT guidance currently explains the registration threshold, VAT operation and an example that adds profit to net cost before VAT. It also distinguishes taxable, zero-rated and exempt supplies.

Do not automatically add 16 percent to every online listing or describe a margin as tax. Confirm whether the business is VAT registered, whether the item is taxable and whether the displayed price must include the relevant tax. Seek current advice from KRA or a qualified professional where uncertain.

Keep the customer's price communication clear. Kenya's Consumer Protection Act is available through Kenya Law and addresses consumer agreements and unfair practices. This guide is not legal advice, but a surprise compulsory charge weakens trust even when the base price looked attractive.

Price bundles and variants separately

A “router” listing could refer to the device alone, a device with a power adapter, or a package with installation and a data bundle. State exactly what the advertised amount includes. Calculate each bundle from its components rather than adding a round number.

Create a distinct cost line for every variant. Colour may not change cost, but storage capacity, cable length, battery size and warranty often do. If the image shows accessories that are not included, the price and description can mislead the buyer.

Review prices when inputs change

Set a review trigger instead of waiting for profit to disappear. Recalculate when:

• a supplier changes price or minimum quantity;
• exchange rates materially affect replacement cost;
• transport or packaging cost changes;
• a marketplace revises its fees;
• the return or damage rate rises;
• stock has aged and needs an approved clearance plan;
• a new model changes market demand.

Keep the old price, effective date and reason for each change. This makes customer support and bookkeeping much easier.

Use a one-page pricing record

For every SKU, retain:

• product name, exact model and variant;
• supplier and invoice date;
• landed unit cost calculation;
• operating-cost allocation;
• channel and payment costs;
• target profit and resulting margin;
• normal price and approved promotion floor;
• tax treatment confirmed for the business;
• competitor checks and dates;
• final approval and review date.

This record turns pricing into a repeatable decision. It also shows quickly whether a discount is reducing profit or merely removing an inflated first price. In practice, this is how to price products for online selling in Kenya without relying on an arbitrary markup.

Once the calculation is complete, publish a precise listing and remind buyers to confirm current stock, final price, warranty, delivery and payment terms with the seller. JAAT's seller tips can help with listing readiness. To request a managed shop or business presence, review seller packages and apply for space; approval follows management review.