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How to set prices in an online store

| Article: 3 min read | Marketing

A pricing strategy is the rule by which a store sets prices: from cost, from competitors' prices, or from the value of the product to the shopper. The price must cover costs and leave a margin, but not scare the shopper off.

Three basic approaches

These are well-known approaches, not the result of a single study.

Approach

How it is calculated

When it fits

Risk

Cost-plus

Cost + markup

The basis for any price, the lower bound

Ignores the market and value

Competitor-based

Follow the prices of Rozetka, Prom, others

Products that are easy to compare (electronics, big brands)

A price war and lost margin

Value-based

What the shopper is willing to pay for the benefit

Unique, own-brand and branded products

Hard to measure

Markup and margin formulas, an illustrative example: cost UAH 700, price UAH 1,000. Markup = (1,000 − 700) / 700 ≈ 43%. Gross margin = (1,000 − 700) / 1,000 = 30%. These are different numbers, and confusing them is a common cause of losses. More in gross margin.

A price is not just the number on the product page

The shopper compares the sum they will pay at the end. According to Baymard (updated September 2025), of those who abandoned a cart for a reason other than "just browsing," 40% named extra costs that were too high (delivery, taxes, fees), and 12% said the total was not visible up front. The data is about online shoppers in the US (Baymard). In Ukraine, Promodo names delivery costing 15–20% of the product price as one of the main barriers to online purchases (Promodo, 2025). So a price should be considered together with delivery: see the free shipping threshold and cash on delivery.

What is known about the Ukrainian market

Promodo (H1 2025): shoppers have become more price-sensitive, buy more often and in smaller baskets; the steadiest revenue comes from existing customers (Promodo, 2025). According to WayForPay data collected in a Borgexpert review, consumer prices in the first half of 2026 were about 7.8% higher than a year earlier; the average online card payment in Q1 2026 was UAH 654 versus UAH 580 in Q1 2025 (Borgexpert, 2026). These are general figures, not advice about your product.

What to do

  1. Calculate the full cost: purchase, delivery to the warehouse, packaging, marketplace or payment processing commission, returns, advertising. That gives your price floor. See unit economics.
  2. For products that are easy to compare, look at the market, but do not copy the lowest price: check whether any margin is left.
  3. For own-brand and branded products, test the value: an A/B test of two prices on equal groups of shoppers.
  4. Divide the range by role: traffic magnets (price on display), the core range, high-margin accessory products (ABC-XYZ).
  5. Do not change prices too often, and make sure the cart total matches the price on the product page.
  6. Look at the result, not only at conversion: sales growth with falling margin is bad.

Common mistakes

  • Calculating markup instead of margin.
  • Leaving delivery, returns and commissions out of the price.
  • Copying a competitor's prices without considering their cost.
  • Round "for the promotion" prices without recalculating.
  • Different prices on the site, in the feed and on the marketplace (Product feed).

FAQ

How do you set the price of a product in an online store? From the full cost plus a target margin, then check the market and the value to the shopper.

How is markup different from margin? Markup is calculated from cost, margin from price. Cost 700, price 1,000: markup ≈ 43%, margin 30%.

Should you be the cheapest? Not necessarily. According to Promodo (2025), shoppers are more price-sensitive, but there is no recent data on whether Ukrainian stores win by having the lowest price.

Sources

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