How to Price Products on Online Marketplaces Without Losing Profit
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Introduction
One of the biggest challenges for online sellers is figuring out the right price for their products. Set the price too high and customers scroll past you. Set it too low and you might get sales but lose money on every order.
Pricing on marketplaces like Amazon, eBay, and Walmart is especially tricky because you’re competing with dozens — sometimes hundreds — of other sellers offering nearly identical items. To succeed, you need a strategy that balances competitiveness, profitability, and customer perception.
Here’s how you can price your products on online marketplaces without losing profit.
Step One: Understand Marketplace Fees
Every marketplace takes a cut of your sale. Amazon charges referral fees and fulfillment fees if you use FBA. eBay has final value fees, and Walmart has its own commission system. Before setting a price, you need to know exactly what you’ll make after all costs. That means calculating marketplace commissions, shipping costs, advertising expenses, and of course your cost of goods. Once you know your true cost per sale, you can set a price that keeps your business profitable.
Step Two: Research Competitor Pricing
Your price doesn’t exist in a vacuum. Customers can instantly compare you to competitors, so you need to understand what others are charging. Look at the top search results for your product keywords. Pay attention to whether competitors offer bundles, discounts, or free shipping. Often you don’t need to be the cheapest option, but you do need to be competitive. A slightly higher price paired with faster shipping or stronger reviews can still win the sale.
Step Three: Use Psychological Pricing
Human behavior influences how people see prices. A product listed at nineteen dollars and ninety-nine cents often sells better than the same one at twenty dollars. Small differences like this can change conversion rates. You can also use strategies such as offering tiered pricing where buying more saves money, creating bundles of complementary items, or providing a first-time buyer discount. These approaches let you maximize sales without slashing your base price.
Step Four: Consider Automated Repricing Tools
On platforms like Amazon and Walmart, competition shifts constantly. Automated repricing software can adjust your product’s price within limits you set, helping you stay competitive without constantly changing prices manually. You can set a minimum floor price so your margins are safe, and many repricers are designed to help sellers win the Buy Box. This is especially useful if you sell high-volume products in crowded categories.
Step Five: Highlight Value Beyond Price
Not every customer chooses the cheapest option. Many are willing to pay more if they believe they are getting better value. That might mean offering faster shipping, providing higher quality images and descriptions, answering common questions clearly, or building a strong track record of positive reviews. When customers see value, you can often charge more than your competitors and still make the sale.
Step Six: Test and Adjust Regularly
Pricing is never a “set it and forget it” situation. Demand changes, competitors shift strategies, and marketplaces update policies all the time. The best approach is to test and refine your pricing. Try different prices over a period of weeks and track how they affect sales and profit. Pay attention to conversion rates as well as total revenue. Sometimes even a one-dollar adjustment can have a major impact when multiplied over hundreds of sales.
Step Seven: Build Long-Term Strategies
Your pricing strategy should also reflect your long-term goals. If your goal is quick turnover and growth, you might accept lower margins to build momentum. If you’re focused on creating a premium brand, you may set prices higher and emphasize quality, exclusivity, or unique features. Think carefully about whether you’re building for short-term sales or long-term customer loyalty, and let your pricing reflect that vision.
Conclusion
Pricing products on online marketplaces is part science and part art. By understanding fees, researching competitors, applying psychology, and testing regularly, you can find the balance between being competitive and staying profitable.
The goal is to attract customers with fair prices while protecting the margins that keep your business growing. When done right, pricing becomes a powerful tool for building success in crowded marketplaces.
At EzBuyCo, we share practical strategies to help sellers thrive online. Stay tuned for more insights into building your e-commerce business in 2025 and beyond.