How to Price Your Product So You Actually Make a Profit
Many South African entrepreneurs are working incredibly hard and still struggling financially. More often than not, the problem isn't the product or the effort — it's the price.
The Formula: Cost-Plus Pricing
Your minimum price = Total Cost Per Unit — (1 + Desired Profit Margin)
- Material cost per unit: R45
- Labour cost per unit: R15
- Overhead per unit: R10
- Total cost: R70 At 40% margin: R98 minimum selling price
lightbulb Most people forget
Include your own time as a cost. If you work 8 hours to make something and charge yourself nothing, you're hiding the true cost.
Target Profit Margins by Sector
- Food & FMCG: 30–50%
- Clothing & handmade goods: 50–100%
- Services: 50–70%
- Digital products: 70–90%
The goal is not to be the cheapest. The goal is to be the best value.
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