How to price products for online selling in Pakistan

Most new sellers price the way their supplier’s other customers do: double the wholesale rate and round it. On cash on delivery, that often leaves almost nothing. Below is how to build a price from the bottom up, check it against what buyers see on Daraz and Instagram, and know when it is time to raise it. The rupee figures are a worked example, not market rates. Put in your own.

Every cost in one order

Your price has to pay for everything that happens between the supplier and the buyer’s door. List these for each product:

• Landed cost. The wholesale rate plus the cargo or courier charge to get stock to you, divided across the pieces, plus anything you lose to defects. Our guide to wholesale suppliers in Pakistan covers working this out.
• Packaging. Flyer bag, box, tape, tissue, the printed slip. Small, but it is on every parcel, including the ones that come back.
• Courier charge. By weight and city, from your courier’s rate card. Couriers bill the bigger of the real weight and the box size; the courier charges calculator works out both.
• Returns. The courier charge on parcels the buyer refused, and any return fee. More on this below.
• Ad spend per delivered order. If you run ads, divide what you spent by the orders that were delivered, not the orders that came in.
• The 2% COD tax. Taken by the courier from the cash it collects.

Rent, salaries and your phone bill are not on this list. They are monthly costs, and you cover them with the number of orders, not by loading them onto each piece. That comes up again at the end.

Put returns into the price

A refused parcel earns nothing, but you still paid to send it and pack it, and sometimes to get it back. Those costs have to be carried by the orders that did get delivered. Count per 100 parcels you send:

Example. Courier Rs 240 and packaging Rs 60 per parcel, a return fee of Rs 100, and 20 out of 100 parcels refused.

• Sending 100 parcels: 100 × Rs 300 = Rs 30,000.
• Return fees on 20 parcels: 20 × Rs 100 = Rs 2,000.
• Delivered: 80 parcels. Rs 32,000 ÷ 80 = Rs 400 per delivered order.

So shipping in this example costs Rs 400 per sale, not Rs 240. Return fees differ by courier. Leopards Retail COD says it charges no return fees, as of October 2026; for any other courier, ask for the return charge in writing. Our comparison of the best courier services in Pakistan has what each one publishes.

Use your own return rate, measured over the last month or two, and per product if you can. If it is high, fixing it is worth more than any pricing trick: see how to reduce COD returns.

Ads work the same way. If you spent Rs 24,000 on ads and 80 orders were delivered, ads cost Rs 300 per delivered order, even though 100 orders came in. The ad break-even calculator shows the most you can pay per order before ads eat the profit.

The 2% the courier keeps

Since the Finance Act 2025, a courier that collects cash on delivery for an online seller has to withhold income tax at 2% of the gross amount when it sends you the money. That is from FBR’s Income Tax Circular 01 of 2025–26, dated August 2, 2025, which called this a final tax on income from local e-commerce sales. The Finance Act 2026 changed that: above Rs 200 million turnover it is adjustable, and smaller sellers may opt out of the final regime from tax year 2027. For pricing, the 2% still leaves your payout. The same circular says couriers may not serve sellers who are not registered for income tax, so if you have no NTN yet, read NTN kaise banayein first.

For pricing, the point is simple: 2% of every delivered order’s price never reaches you. On a Rs 2,600 order that is Rs 52. Because it is a percentage of the price, it goes in the formula as a percentage, not as a fixed cost. If sales tax applies to you as well, the sales tax calculator covers the online seller rates.

Margin is not markup

These two get mixed up all the time, and the mix-up costs money.

• Markup is profit as a percentage of your cost.
• Margin is profit as a percentage of the selling price.

A suit that costs you Rs 1,000 and sells for Rs 1,500 has a 50% markup and a 33% margin. A seller who wants “50% profit” and adds 50% to cost gets a 33% margin, before courier, returns and ads take their share.

Set your target as a margin on the selling price. The courier tax, Daraz’s commission if you sell there, and any discount are all taken from the selling price, so margin is the number that lines up with them. The profit margin calculator converts between the two and gives the price for a target margin. For the margin itself worked through line by line, with a spreadsheet layout, see how to calculate profit margin for a product.

The formula, worked through

Price = cost per delivered order ÷ (1 − target margin − 0.02)

Continuing the example:

• Landed cost of the piece: Rs 1,200
• Courier, packaging and returns per delivered order: Rs 400
• Ads per delivered order: Rs 300
• Cost per delivered order: Rs 1,900
• Target margin: 25%, so divide by 1 − 0.25 − 0.02 = 0.73
• Price: 1,900 ÷ 0.73 = Rs 2,603, so about Rs 2,600

Check it: Rs 2,600 minus Rs 1,900 minus Rs 52 tax leaves Rs 648, which is 25% of the price.

Now the “double the wholesale rate” price. At Rs 2,400, the same order leaves Rs 2,400 − Rs 1,900 − Rs 48 = Rs 452. The seller thinks they make Rs 1,200 a piece and actually make less than half of that. Every rise in the return rate or the ad cost cuts it further.

To test your price against a higher return rate, use the COD profit calculator; it also shows the highest return rate you can afford at a given price.

Then the monthly check. If your fixed costs are Rs 60,000 a month and each order leaves Rs 648, you need about 93 delivered orders a month to cover them. If that is more than you can sell or pack, the price or the costs have to change.

Check it against the market

Your cost-based price is the floor. What buyers will pay is the ceiling. Before you list, look at the same or a similar item where your buyers shop:

• Daraz. Search the item, sort by price, and look at the listings with ratings and reviews, not the cheapest one with none. Note whether delivery is free or charged. A Daraz seller pays commission and fees on that price, so a lower price there does not mean a lower cost; the Daraz profit calculator shows what they keep.
• Instagram and Facebook. Look at pages selling to the same buyers. Many put “DM for price”; ask. Check whether delivery is extra, and how good their photos and sizing are, because buyers compare those too.
• Compare like with like. Fabric, stitched or unstitched, pieces in the set, size range, delivery time. A cheaper price on a thinner fabric is not your competitor.

What to do with what you find:

• Your price sits inside the range. Good. Compete on photos, sizes, speed and a quick reply.
• Your price is above everyone. Either give buyers a visible reason (better fabric, better finish, faster delivery), or find a cheaper supplier, cheaper packaging or lower returns.
• Others sell below your cost. They may be making a loss, cutting quality or not counting returns. Do not follow them down. Pick a different product.

Price endings, bundles and delivery

Endings. Rs 2,499 reads cheaper than Rs 2,500 on a screen, which is why it is everywhere. On cash on delivery the buyer hands notes to a rider, though, and a round total is easier to pay and to say on the confirmation call. A fair rule: end prices in 49 or 99 where buyers compare on screen, and keep the total at the door round.

Bundles. Courier and packaging cost about the same for one piece as for two. “Any 2 for Rs 4,800” against Rs 2,600 each gives the buyer a reason to add a second piece and spreads your Rs 400 shipping across both. Work out the profit first with the discount calculator; it shows how many more orders a discount needs to earn the same.

Delivery charge. “Free delivery” means the courier cost lives inside your price. Charging Rs 200 on top keeps the product price lower but is one more number at the door. Both work. What does not work is a total the buyer hears for the first time from the rider. Say the full amount when you confirm the order. To work out the fee itself, see how to set delivery charges.

Fake discounts. Do not mark a price up so you can mark it down. Buyers screenshot prices and will say so in your comments. Our guide to the 11.11 sale covers pricing a real discount that still profits.

When to raise your price

Recalculate when any line in the formula moves:

• Your supplier puts the rate up, or the cargo charge to you goes up.
• Your courier sends a new rate card.
• Your return rate rises for a product, and stays up after you fix the listing.
• Ads cost more per delivered order than they did when you set the price.
• A product sells out every time you restock it. That is buyers telling you the price has room.

How to raise it without losing buyers:

• Raise on new stock or a new design, where there is no old price to compare against.
• Move in steps of a few percent, not one big jump.
• Keep one or two well-known pieces at their price, so regular buyers see something familiar.
• Improve something buyers can see at the same time: better packing, a size chart, quicker dispatch.
• Do not raise the price of an order already confirmed on the phone.

Lower a price only after you have checked the cause. If a product does not sell, look at the photos, the description and the sizes before you cut the price.

Questions sellers ask

How do I calculate the selling price of a product?

Add up everything one delivered order costs you: the product, packaging, courier, your share of returned parcels and the ad spend per delivered order. Then divide by (1 minus your target margin minus 2% for the COD income tax the courier withholds). For a cost of Rs 1,900 and a 25% margin, that is 1,900 ÷ 0.73, about Rs 2,600.

What is the difference between margin and markup?

Markup is profit as a percentage of your cost. Margin is profit as a percentage of the selling price. A piece that costs Rs 1,000 and sells for Rs 1,500 has a 50% markup but a 33% margin. Set targets in margin, because every cost and tax is taken from the selling price.

What is a good profit margin for an online business in Pakistan?

There is no reliable national figure, and it changes a lot by product. Work out your margin after courier, returns, ads and the 2% COD tax, not before. If what is left cannot cover your monthly fixed costs at the number of orders you can realistically handle, the price is too low.

Do online sellers pay tax on cash on delivery orders?

Yes. Under FBR’s Income Tax Circular 01 of 2025–26, a courier collecting cash on delivery for an online seller must withhold 2% of the gross amount when it sends the money to the seller. On a Rs 2,600 order that is Rs 52. The circular called it a final tax; the Finance Act 2026 makes it adjustable above Rs 200 million turnover and lets smaller sellers opt out of the final regime from tax year 2027.

Should I offer free delivery or charge it separately?

Either works if the courier cost is covered somewhere. Free delivery means building the courier charge into the product price. Charging separately keeps the product price lower but adds a number the buyer may not expect at the door. Whichever you choose, say the full amount at the door before you dispatch.

Storelala is the Shopify alternative in Pakistan: your own store at yourbrand.storelala.com, cash on delivery built into checkout, no marketplace commission taken from your price, and free to start with no card needed. Start your store and sell at a price that still pays after the courier.