How to Price Products Effectively on TikTok

Pricing your products on TikTok feels different because it is different. You're not just setting a number, you're inserting your product into fast-moving trends and conversations. This guide breaks down exactly how to calculate your baseline costs, analyze the market, apply pricing strategies that work for the platform, and test your way to the perfect price point.

The Essential First Step: Know Your Numbers Cold

Before you even think about what your audience will pay, you have to know what it costs to get your product into their hands. If you skip this step, you’re flying blind and risking profitability. Let's break down the essential math without making it complicated.

Calculate Your Cost of Goods Sold (COGS)

Your COGS is the direct cost of producing the product you sell. It’s the foundation of your entire pricing strategy. Don't eyeball this number, calculate it precisely.

• Raw Materials: The cost of every component that goes into your product. If you make candles, this includes wax, wicks, fragrance oils, and jars.
• Direct Labor: The wages you pay for the hands-on work of creating the product. If you assemble it yourself, assign yourself an hourly wage to accurately capture this cost.
• Manufacturing Overhead: The indirect costs associated with production, such as the electricity used by your equipment or machinery maintenance.

Once you have these numbers, add them up to find the cost per unit. For example, if your total production cost for 100 candles is $500, your COGS per candle is $5.

Factor In All the Other Expenses

COGS is just the beginning. Lots of other costs eat into your margins, and you need to account for them. These are often called operating or overhead expenses.

• Packaging and Shipping: This includes the box, bubble wrap, tape, labels, and the actual cost to ship the item. Shipping costs can vary wildly, so either find an average or include different shipping tiers.
• TikTok Marketing Costs: Are you boosting posts, running ads, or paying creators? This budget needs to be factored into your overall pricing structure. A common approach is to assign a small percentage of your marketing spend to each product.
• Platform Fees: If you're using TikTok Shop or another platform like Shopify, they take a cut of every sale. Don't forget to include these transaction fees.
• General Business Overhead: This includes software subscriptions, website hosting, insurance, and other administrative costs. Spread this out over your total number of expected sales for a specific period.

Set Your Profit Margin

Your profit margin is what’s left over after all costs are paid - it's how your business grows, pays you, and invests in new products. There’s no single "correct" margin, it depends on your industry, brand positioning, and business goals. A typical margin for physical products can range from 30% to 60%, but this varies. Choose a target that feels sustainable for your business.

Here's a basic formula to bring it all together:

(COGS + Total Overhead Per Unit) / (1 - Desired Profit Margin %) = Selling Price

So, if your candle costs $5 (COGS) + $4 (overhead) = $9 total cost, and you want a 50% profit margin:

$9 / (1 - 0.50) = $18

Now you have a data-driven starting point: $18. This is your floor. You shouldn't price below this unless you have a strategic reason, like a loss-leader campaign.

Scour TikTok: Research Your Market & Perceived Value

With your baseline price calculated, it's time to see where you fit in the actual TikTok ecosystem. On this platform, pricing is less about what a product is worth and more about what it feels like it's worth. This is the art that complements the science of your cost calculations.

How to Find and Analyze Competitors

Your competitors aren't just brands selling identical products. They're anyone vying for your target audience's attention and budget. Here's how to find them:

• Search Key Hashtags: Use hashtags like #smallbusiness, #tiktokmademebuyit, or product-specific tags like #handmadejewelry or #skincare. See what pops up, who is getting views, and what prices are visible in their bios or TikTok Shops.
• Analyze "TikTok Made Me Buy It" Videos: This trend is a goldmine. Pay close attention to the products that go viral. What is their price point? How are they presented? This gives you an idea of what customers are willing to spend impulsively.
• Look at Their Shops: Click through to the TikTok Shops and websites of similar brands. Don't just look at the list price. See if they offer bundles, free shipping thresholds, or subscriptions. Note their average price across their entire product range.

Understand and Cultivate Perceived Value

Perceived value is a customer’s own estimation of a product’s worth. TikTok is a masterclass in shaping this perception through storytelling and visual appeal.

For example, a simple coffee mug sold with a basic product photo might only fetch $10. But on TikTok, that same mug can sell for $25 if the video shows:

• The artist happily hand-painting each unique detail.
• A cozy, aesthetic scene where someone is enjoying a warm drink from the mug on a rainy day.
• Dozens of positive user comments flashing on the screen.
• The satisfying sound of the mug being unboxed from beautiful, custom packaging.

Your content directly influences how much someone is willing to pay. Investing in good lighting, clear audio, and a compelling narrative allows you to charge a premium because you’re not just selling a product, you’re selling a feeling, a solution, or an experience.

Psychological Pricing Tactics Proven to Work on TikTok

Once you've done your research, you can fine-tune your price using psychological triggers. These strategies aren't meant to be deceptive, they help frame your price in a way that feels more appealing to buyers scrolling at lightning speed.

Charm Pricing (The .99 Effect)

This is the classic technique of ending a price with 9, 99, or 95 (e.g., $19.99 instead of $20.00). It works because of the "left-digit effect," where our brains tend to anchor on the first number we read. A price starting with a "1" feels significantly cheaper than one starting with a "2," even if it’s only a one-cent difference. It signals a good deal and is perfect for TikTok’s quick purchasing environment.

Bundle Pricing to Increase Average Order Value (AOV)

Encourage customers to spend more by offering them a deal for buying multiple items. Bundles make customers feel like they're getting more for their money, and it simplifies the decision-making process. For example:

• A face wash is $20. A moisturizer is $25. Bought separately, that's $45.
• The "Glow Up" Bundle (Face Wash + Moisturizer) is just $39!

This is extremely effective on TikTok. A creator can easily demonstrate how the products work together in a single "Get Ready With Me" video, making the bundle a no-brainer.

Flash Sales and Urgency-Driven Offers

TikTok’s fast-paced "For You Page" is built for urgency. A limited-time offer can turn a passive viewer into an immediate buyer. Use clear, bold text overlays directly in your video.

• "🚨 FLASH SALE! 40% OFF FOR THE NEXT 12 HOURS 🚨"
• "Our VIRAL lip gloss is finally back... but only 100 are in stock. Go go go!"
• "Free shipping on all orders this weekend only! Use code: TIKTOK"

These temporary price drops create scarcity and FOMO (Fear of Missing Out), encouraging people to buy now instead of saving your video for later and forgetting about it.

Continuously Test and Tweak Your Prices

Setting your price isn't a one-and-done task. The TikTok market moves fast, and what works today might not work tomorrow. You have to be willing to listen to your audience and adapt.

Run Simple A/B Tests

You don't need fancy software to test your pricing. If you're running ads through TikTok Ads Manager, create two identical ads with the same creative and targeting, but direct them to two different landing pages where the product has a slightly different price.

• Ad #1 directs to a page with the product priced at $24.99.
• Ad #2 directs to a page with the product priced at $29.99.

Run them for a week with a small budget. Compare the conversion rates and the cost per acquisition (CPA). Sometimes, a higher price will convert less, but the increased margin makes it more profitable overall. The data will reveal the price sweet spot.

Listen to Your Community: Your Comments are Gold

Your followers will give you honest feedback for free. Pay close attention to comments on your videos and DMs.

• If multiple people are commenting "I want one so bad but it's too expensive," that’s a clear signal your price might be too high for a cold audience.
• Conversely, if your product sells out instantly every time you restock, you might be underpriced and have room to increase it slightly.

You can also engage directly. Use the sticker features in your Stories or make a video asking, "If we were to create a deluxe version of our best-selling kit, what would you want in it and what would you feel is a fair price?" It involves your community and gives you priceless market research.

Final Thoughts

Pricing products for TikTok is a dynamic blend of hard numbers, market awareness, persuasive psychology, and constant testing. By grounding your strategy in your costs while staying flexible enough to adapt to perceived value and audience feedback, you can find the pricing that not only covers your expenses but drives sustainable growth for your brand.

Executing these tests and promotional campaigns consistently can be a challenge, especially when trying to sync flash sale videos with inventory levels and landing pages. That's why we built our visual calendar at Postbase as an accessible way for brands to plan their content in advance and see their entire strategy at a glance. When you can schedule out your price tests and promotional campaigns across multiple platforms reliably, you spend less time stressing over logistics and more time focusing on what really matters: creating great content and connecting with your customers.