Question 1

How do I calculate the right selling price from my cost price?

Accepted Answer

Use the formula: Selling Price = Cost Price / (1 - (Target Margin + Platform Fee + Payment Fee) / 100). For example, with a cost of SAR 50, a 40% target margin, 5% platform fee, and 2.5% payment fee, the selling price is 50 / (1 - 0.475) = SAR 95.24. This ensures you achieve your target margin after all deductions.

Question 2

What fees should I include when pricing my products?

Accepted Answer

Include all costs that reduce your revenue: product cost (including shipping to warehouse and packaging), platform/marketplace commission, payment processing fees (mada, credit card, BNPL), shipping to customer (if you offer free shipping), return handling costs, and VAT obligations. Missing any fee leads to overestimating your actual profit.

Question 3

How do Salla and Zid platform fees compare?

Accepted Answer

Both Salla and Zid use tiered subscription models where higher plans offer lower or zero transaction fees. Compare total cost of ownership: divide the monthly subscription by your expected order count to get per-order subscription cost, then add any transaction percentage. The cheapest option depends on your order volume and plan tier.

Question 4

How does VAT affect my product pricing strategy?

Accepted Answer

Calculate your selling price based on cost-plus pricing without VAT first, then add 15% VAT for the consumer price. Your profit margin should be calculated on the pre-VAT amount. For example, if your pre-VAT price is SAR 100, the consumer pays SAR 115, but your margin is based on SAR 100 minus costs. Do not include VAT as part of your revenue in margin calculations.

Question 5

Do psychological pricing tactics like SAR 99 work in Saudi Arabia?

Accepted Answer

Yes. Charm pricing (ending in 9 or 99) is effective for most product categories in the Saudi market. Products priced at SAR 99 consistently convert better than SAR 100. For premium or luxury items, round numbers (SAR 500) can signal quality. Test both approaches with your specific audience and measure conversion rate differences.

Question 6

When should I reprice my products?

Accepted Answer

Reprice whenever supplier costs change, platform fees are updated, new payment methods with different merchant fees are added, competitor pricing shifts significantly, or seasonal demand patterns change. Review pricing quarterly at minimum. During high-demand seasons like Ramadan and National Day, you may be able to support slightly higher prices due to increased willingness to spend.