Pricing for small retail: stop competing on the number

Small stores that discount to match a larger competitor lose twice: on margin now, and on positioning later. You cannot out-cheap a business with better logistics.

Work backwards from the margin you need to keep the business healthy. Cost of goods, shipping, payment fees, packaging, and returns all belong in the calculation before you look at anyone else's price.

Then make the price easier to accept. Bundles, free shipping above a threshold, and a clear guarantee move more units than shaving a few percent off.

Raise prices in small steps and watch conversion for two weeks. In most cases nothing happens except that the store becomes profitable.