Pricing & Cash Flow Kit
Pricing & Cash Flow Kit
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The price you set is not the price you keep
Most founders set a price by looking at three things: what the materials cost, what competitors charge, and what "feels right". Then they add a bit on top and call it profit. It works until the month you sell more than ever and still cannot pay rent.
The problem is not your sales. The problem is the costs that do not show up on the supplier's receipt. The box. The sticker. The helper you pay by the day. The fee your payment provider takes from every order. The delivery you "absorb" so the customer does not walk away. The candle that cracked on the matatu and had to be replaced for free.
Each one is small. Together they can take a third of your price.
Example: Wanjiru runs a candle brand in Nakuru. She buys wax, fragrance, a jar and a wick for KES 340 per candle and sells it for KES 900. She believes she makes KES 560 on every candle. When she adds packaging, her helper's day rate, payment fees, the delivery she subsidizes and a small allowance for breakages, her real cost is KES 522. Her real profit per candle is KES 378, not KES 560. That gap is about KES 22,000 a month at her volume.
What "true unit cost" means
True unit cost is everything you spend to get one product into a customer's hands and keep them happy with it. Not just what it costs to make.
| Cost layer | What it includes | Often forgotten? |
|---|---|---|
| Materials | Raw inputs, components | Rarely |
| Packaging | Box, tissue, sticker, bag, insert card | Often |
| Labour | Daily or piece-rate pay for making and packing | Very often |
| Payment fees | Your provider's percentage on each sale | Very often |
| Delivery subsidy | The part of delivery you pay, not the customer | Almost always |
| Returns and damage | Replacements, refunds, breakages | Almost always |
When you know this number, every other decision gets easier. Pricing. Discounts. Which channel to push. How much stock you can afford to hold.
Why this matters more than you think
A wrong unit cost does not just shrink your profit. It hides which products are losing money, makes your best-selling item look healthier than it is, and tells you to run promotions you cannot afford. In Chapter 2 you will build your own unit cost sheet line by line. But first, there is one cost that almost every founder gets wrong, and it is the one that grows fastest as you scale...
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