How to price products for profit in a small store

September 29, 2026 · 3 min read

Busy stores can still lose money if prices are wrong. The fix starts with knowing your real cost for every item.

Know your real cost

Your cost is not only what the grocery charged. Add the fare or gas to get there and any ice or plastic you use. Spread it across the items you bought.

Example: you buy 24 bottles of softdrinks for ₱480 and spend ₱60 on the trip. Your cost is (₱480 + ₱60) ÷ 24 = ₱22.50 per bottle, not ₱20.

Markup and margin are different

Markup is how much you add on top of cost. Margin is how much of the selling price is profit. Mixing them up is a common reason stores earn less than they think.

To price with a markup: selling price = cost × (1 + markup). A 20% markup on ₱22.50 is ₱22.50 × 1.20 = ₱27.00.

Not every item needs the same markup

• Items people compare, like rice, eggs and softdrinks: keep close to the nearby price, even with a small markup.
• Convenience items, like single cigarettes, candies, ice and load: customers pay for the convenience, so the markup can be higher.
• Slow items: price them higher, because your money is stuck in them longer.

Update prices when your cost changes

Suppliers raise prices quietly. If you keep selling at the old price, your profit disappears without you noticing. Check your cost every time you restock.

Look at profit, not just sales

A day with ₱5,000 in sales and ₱400 profit is worse than a day with ₱3,000 in sales and ₱600 profit. Track both. Your profit, after costs and expenses, is what you actually earned.

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