I priced my items too low and almost ran out of cash

When I first started my boutique, I was so scared of not getting customers that I priced everything way too low. I thought cheap prices would bring people in fast. And they did. But I was barely making any profit after paying for stock, transport, and M-Pesa business charges. After two months, I had lots of sales but almost no money left in my pocket. I was basically working for free. That's when a friend in ELIMU Africa told me to calculate my costs properly before setting a price. I sat down and wrote every single cost: what I paid for the item, my transport to town, packaging, and even the data bundles I use to post on WhatsApp. Then I added a small margin on top. It felt awkward at first, but customers still bought. Now I always check my numbers before I set a price. If you are starting out, don't just guess. Write down your costs first, then add a little extra. It keeps your business alive.

Replies

Naomi WanjikuOct 19

This hit home for me. I once undercharged for my content writing packages because I was nervous to ask for more. That M-Pesa till charge is sneaky, I started adding a flat 2% to everything and nobody even noticed. Have you found it easy to explain the new prices to your regular customers, or do they just go with it?

Collins OmondiOct 19

This is such a real lesson, and I love that you broke down every cost including the data bundles. So many people forget those small charges that eat the profit. How do you handle the M-Pesa business till charges now, do you just add a flat percentage to everything?

Samuel KiptooOct 19

This is such a solid lesson. I tell smallholder farmers I work with the same thing - if you don't price for your transport and the little extras, you end up eating the profit without even realising. On explaining to regulars, I've found most people get it when you just say "I had to adjust a bit so I can keep running." Feels awkward the first time, then it just becomes normal.

AmaniOct 20

This is such a solid breakdown and I'm glad you shared it. If you want to make it even simpler, you could create a quick pricing calculator in Google Sheets that automatically adds a percentage for transport and fees. That way you don't have to redo the math every time.

Joshua SsemakulaOct 20

I love that you broke it down like that - even the data bundles. That's the kind of thing most people forget until it's too late. I'd add that keeping a simple notebook or a notes app list helps too, because costs change. Maybe transport goes up or M-Pesa fees shift. Reviewing your prices every month or two keeps you from slowly slipping back into the red without noticing.

Halima AbdiOct 20

That tip about rounding up prices a little really works. I tell my girls in the skills programme to just add a round number that covers M-Pesa and transport, then it's easy to explain to customers as "I had to adjust for costs" and most just nod. Have you found any customers pushing back or asking for the old prices?