The Anatomy of a Price
Every rupee you earn isn't profit. Here is where your money actually goes.
Margin vs. Markup
Markup helps you set the price. Margin tells you what you actually keep.
You add 50% to your cost. You think you make 50% profit. You don't.
Example: Cost ₹100. Price
₹150.
Markup is 50%. But your profit is only ₹50 out of ₹150.
The percentage of the final selling price that is actual profit.
Example: Cost ₹100. Price
₹150.
Profit is ₹50. That is 33% Margin.
The Psychology of Pricing
The Charm Effect
Prices ending in 9 or 99 are perceived as significantly lower. ₹99 feels like "deals", while ₹100 feels like "premium".
Anchor Pricing
Show the original price next to the sale price. The higher price becomes the "anchor", making the current price feel like a steal.
Bundle Pricing
Selling slightly more for a discount increases your Average Order Value (AOV) and perceived value for the customer.
Your Margin Mastery Guide
Multiply your cost by these numbers to get your desired margin.
| If you want... | Price Must Be... | Status |
|---|---|---|
| 10% Margin | Cost x 1.11 | Risky |
| 20% Margin | Cost x 1.25 | Low |
| 30% Margin | Cost x 1.43 | Healthy |
| 40% Margin | Cost x 1.67 | Strong |
| 50% Margin | Cost x 2.00 | Excellent |