The pricing mistake that costs small sellers the most is not underpricing on purpose. It is accepting a sale that never made money, because the landed cost was never written down. The right number is arithmetic, not opinion: unit cost, shipping, packaging, marketplace and payment fees, returns, and advertising, divided across the units you actually sell. A pricing prompt's job is to force that arithmetic out of your head and into a table you can argue with.
Once the floor exists, everything else is a decision about position: price above the floor for margin, at it for volume, or below it only when the sale still covers its variable costs. The prompts below build the floor first, then handle the negotiation.
What a floor price is and why sellers skip it
Your floor price is the lowest price at which one more sale still leaves money in the business. It is not your cost. It is not the competitor's price. It is the point where every variable cost for that single order has been paid.
Sellers skip it because the costs arrive at different times. The supplier invoice lands monthly. The payment fee is a percentage nobody itemises. Returns show up three weeks later as a warehouse slot. Advertising is a number in a dashboard that changes daily. Put them together once, per order, and the picture stops being arguable.
The most common error is treating shipping as someone else's cost. When a buyer sees free delivery, it came out of your margin. Shipping and packaging belong in the floor calculation whether or not the listing shows them.
The floor price prompt: force the arithmetic
The output you want is a table, not advice. Models are unreliable at mental arithmetic and reliable at careful shown working, so demand the steps.
Work out the floor price for one unit of [product] sold on [marketplace, country]. Use only the numbers I give you below, and show every step. Costs per order: - Unit cost from supplier: [amount and currency] - Quantity ordered and break discounts: [quantity, price per tier] - Outbound shipping paid by seller: [amount, or "buyer pays"] - Packaging cost: [amount] - Marketplace commission rate: [percent] - Payment processing rate and fixed fee: [percent and amount] - Other per-order fees: [list] - Advertising cost per sale: [amount, and how you calculated it] - Expected return rate and average return cost: [percent, amount] - Storage and fulfilment cost per order: [amount] Do the following: 1. Show a cost table with one row per line and a total variable cost per order. 2. Work out the break-even selling price, where the contribution is exactly zero. 3. Work out the floor price at a 20 percent contribution margin, and state which costs make it higher than break-even. 4. Recalculate at your likely selling price of [price] and state the money per order and the margin percentage. 5. List every input that most affects the answer, ranked, and mark any I gave you as an estimate. Do not invent any cost I did not supply. Do not round silently. If a value is missing, write [CONFIRM: input needed] in the table and give the answer as a range or formula instead. Do not tell me whether the price is competitive; that is a separate question.
Fill in these details
- Supplier tiers: prices change with quantity, and the price at your realistic order size is the one that matters.
- Fee rates: commission and payment fees vary by marketplace, category and sometimes by seller tier. Take the current figures from your own account rather than memory.
- Advertising cost per sale: divide spend by orders, not by clicks. A click cost that has not been divided by conversion rate is not a cost per sale.
- Return rate: a rate you guess produces a confident wrong floor. Use your own history, or state clearly that it is an assumption.
The last instruction, refusing to comment on competitiveness, is deliberate. Blending the two questions is how a model ends up telling you a floor price that is really a market guess.
Positioning above the floor
Once you have the number, the decision is where to sit. Two prompts handle that.
Here is my floor price and contribution margin for [product]: [paste the table]. Competitor prices I observed on [marketplace]: [list]. Do the following: 1. Present three positions: floor plus a modest margin for volume selling, a middle position, and a premium position. Show the margin per order for each. 2. For each position, state plainly what a buyer gets that they would not get at the cheaper position. If nothing, say so. 3. Tell me which single input from my cost table would have to change for the premium position to become viable, without changing the price. 4. List the questions I should answer before choosing, rather than recommending a position.
A buyer wants a bulk discount on [product] at a quantity of [n]. My floor price is [floor], my listed price is [price], and my per-order variable cost is [cost]. Work out the price I can offer at that quantity, showing each cost line, and state whether the order still clears my floor. If it does not, tell me the smallest quantity or price change that would make it work, and say plainly that the correct answer may be to decline the order.
Declining is a real option and worth writing into the prompt. Bulk requests that clear costs on paper often fail after returns, and the seller who has a floor they trust can say no in a minute.
Worked example: one product, three numbers
A seller supplies these figures and gets this back.
| Line | Per order |
|---|---|
| Unit cost at 50 units | 240.00 |
| Shipping paid by seller | 95.00 |
| Packaging | 18.00 |
| Commission at 15 percent of price | varies |
| Payment processing at 2 percent | varies |
| Advertising per sale | 60.00 |
| Returns provision at 8 percent | 32.00 |
| Fixed costs per order | 25.00 |
| Total before percentage fees | 470.00 |
At a 700.00 selling price, the percentage fees come to 119.00, giving a contribution of 111.00, or about 16 percent. The prompt then flags advertising as the input that moves the answer most, because it is the only line the seller estimated. A floor built on an estimated ad cost is not a floor, and this one says so.
Read the estimate marks before you trust the number
- Percentage fees rise with price. A commission of 15 percent is not a fixed cost, so break-even is higher than a simple cost-plus calculation suggests.
- Estimated inputs are the weak point. If advertising, returns or storage were guesses, the whole table is a guess with a decimal point.
- Freight and duties belong in unit cost. A supplier quote excluding shipping is not your landed cost.
- Rounding hides the edge. A seller who rounds a floor up to a tidier number has moved the risk onto the order.
- One product is not one business. Recalculate per product, because heavier items and higher return rates move the floor in different directions.
Mistakes that quietly set the price too low
- Pricing from the competitor's listing. It tells you nothing about their fees, returns or ad cost.
- Treating shipping as the buyer's problem. Free delivery is your margin.
- Ignoring returns on apparel sizing. A high return rate can move a floor more than any discount.
- Discounting from the listed price. Percentage discounts cut deeper as the price falls, because fees are percentage too.
- Using click cost instead of cost per sale. A cheap click that rarely converts is an expensive sale.
- Not recalculating after a supplier change. Recalculate when costs, fees or ad spend move, not once a year.
Frequently asked questions
What is the difference between break-even and floor price?
Break-even is where a sale leaves zero contribution, so it covers variable costs and nothing else. Floor price is where a sale still contributes enough to be worth accepting, usually expressed as a target margin. The break-even number is the number below which you should stop.
Should I price below the competitor's lowest price?
Only if you can clear your floor doing it, and only if you know what their floor looks like. Their price may be a loss leader, a loss of money, or simply ignorance of their own costs. Price on your costs and let the position follow.
How often should I recalculate?
Whenever a cost, fee rate or advertising cost moves, and at minimum every quarter. Recalculation is arithmetic, so the cost of doing it is a few minutes. The cost of skipping it is discovering it in a monthly total.
Is it worth using a model for this at all?
Yes, because the value is not the arithmetic, it is the discipline. The prompt makes you supply every cost, forces the percentages to be handled properly, and flags which inputs were guesses. The result is a table you can audit, not an answer to trust.
Write your cost table before you price anything
Take the product you were about to list and fill in the cost table with real figures from your supplier and your account, marking every estimate. Run the prompt, then act on the flagged input first. For the wider numbers side of running a small operation, browse small business tips.