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How to Set Your Prices When Costs Keep Rising in Nigeria

How to price products when costs keep rising in Nigeria: cost-plus pricing, markup vs margin, break-even and ways to raise prices without losing customers.

By the KudiAI Track team · 2026-10-07 · 6 min read

A trader arranging tomatoes for a customer at a busy Nigerian market stall

Set your price from what it will cost you to restock, not from what you paid last time. Add your cost price, a share of your running costs and the profit you need. Then review your prices at least once a month while costs keep moving.

This guide shows the sums step by step, with examples you can copy.

How high is inflation in Nigeria right now?

The latest figure from the National Bureau of Statistics (NBS) is 15.39% for August 2026, slightly down from 15.43% in July. It means prices in August 2026 were, on average, 15.39% higher than a year earlier. Food inflation was higher, at 19.57%.

Slower inflation does not mean prices are falling. Prices are still rising, only more slowly. A seller whose prices have not moved in a year has fallen behind.

NBS rebased the Consumer Price Index in 2025, starting with the January 2025 figures released on 18 February 2025. It now measures prices against a 2024 base year. Older figures, such as 34.8% for December 2024, were worked out on the old basis (NAN).

The national figure is an average. Your own costs may rise faster or slower, so track your own restock prices.

How do rising costs quietly eat your profit?

Take a provisions seller in Nyanya, Abuja. She buys a carton of 40 packs of noodles for ₦12,000, which is ₦300 a pack. She sells each pack at ₦400 and makes ₦100 a pack.

On her next market trip, the carton costs ₦14,000, or ₦350 a pack. She keeps her price at ₦400.

Per carton of 40 packs	Before	After
Cost of the carton	₦12,000	₦14,000
Cost per pack	₦300	₦350
Selling price per pack	₦400	₦400
Profit per pack	₦100	₦50
Profit per carton	₦4,000	₦2,000

Her cost rose by about 17%, but her profit fell by half.

It is worse once running costs count. Say her rent, transport, data and market levies come to ₦60,000 a month, and she sells about 1,200 items a month. That is ₦50 of running costs on every item (₦60,000 ÷ 1,200).

At ₦400, each pack of noodles now earns her nothing. Sales feel busy and cash still comes in, so many traders notice only when the money cannot buy the next carton. Market dey sell, but gain no dey.

How do you calculate a selling price?

Cost-plus pricing is the simplest method. Follow these steps for each item:

Find the cost price per item. Use your latest restock price, not an old one.
Add a share of running costs. Divide your monthly running costs (rent, transport, data, levies, wages) by the number of items you sell in a month.
Add your profit. Choose a markup or a target margin, explained in the next section.
Round and compare. Round to an easy price such as ₦450 or ₦500, then check it against nearby sellers.

For the noodles: ₦350 cost price plus ₦50 running costs gives a full cost of ₦400. A 25% markup adds ₦100, so the selling price is ₦500.

Services work the same way. A tailor in Aba adds thread, lining, buttons, a share of rent and fuel, and a fair value for her hours. Then she adds her profit.

What is the difference between markup and margin?

Both describe the same profit, but measure it against different numbers.

Markup is profit divided by cost, times 100. For the noodles: ₦100 ÷ ₦400 × 100 = 25%.
Margin is profit divided by selling price, times 100. For the noodles: ₦100 ÷ ₦500 × 100 = 20%.

A common mistake is wanting a 20% margin and simply adding 20% to cost. ₦400 plus 20% is ₦480, a profit of ₦80. That is a margin of only 16.7% (₦80 ÷ ₦480).

To reach a target margin, divide your full cost by (100 minus the margin), then multiply by 100. For a 20% margin: ₦400 ÷ 80 × 100 = ₦500.

Markup on cost	Same as margin on price
25%	20%
50%	33.3%
100%	50%

How often should you review your prices?

Every restock: compare the new cost with the last one. If it moved, change that item's price.
Every week: check the cost of your fast-moving items, the ones you restock most often.
Every month: review everything, including running costs, items sold and your margins.

Write down each restock price with the date. Without that record, every price change is a guess.

Some traders reprice old stock as soon as the restock price rises, because that money must buy the next carton. Others sell old stock at the old price. Either way, check that each sale still pays for restocking at today's price.

How can you raise prices without losing customers?

Raise in small steps. Moving the noodles from ₦400 to ₦450 brings her real profit back to ₦50 a pack, as before the cost rise. ₦500 can come later.
Offer smaller sizes. Repack rice, beans, sugar or oil into smaller measures so customers can still buy within their budget. Label the quantity honestly.
Bundle items. Sell bread, eggs and tea together for slightly less than the three bought separately. You sell more to each customer.
Explain honestly. A short sign saying the carton price went up at the market helps regular customers understand.
Keep a few anchor items steady. Customers remember the prices of a few things they buy every day. Hold those steady on a thinner margin, and recover on items people check less often.

Should you charge what your competitors charge?

Know their prices. Once a month, check what three nearby sellers charge for your top items.

Do not copy them blindly. They may still be selling old stock, or losing money without knowing it. If you are much higher, find out why; if much lower, you may be giving away profit.

You can also compete on more than price. Open early, keep your best sellers in stock and always give the correct change.

What is your break-even point?

Break-even is the level of sales where you cover all your running costs, with nothing left over. Divide your monthly running costs by the average profit per item before running costs.

At ₦500, the noodles earn ₦150 above cost price (₦500 minus ₦350). If her items earn ₦150 each on average, she must sell 400 a month (₦60,000 ÷ ₦150) to cover running costs. At her usual 1,200 items, that leaves ₦120,000 profit for the month.

Know this number. When costs rise, your break-even rises too, and a slow month can push you below it.

How KudiAI Track helps

KudiAI Track saves the cost price with every sale, so profit reflects what each item really cost, even after restock prices change. Record expenses such as rent, fuel, wages and restocking, and see real profit by day, week and month. Low-stock alerts warn you before a shelf is empty, which is also the moment to check the new cost.

Questions people ask

What is a good profit margin for a small shop in Nigeria?

There is no single right figure. Fast-selling items often carry a thinner margin than slow-selling ones. Work out the margin that covers your running costs and pays you, then compare it with nearby sellers.

How do I calculate selling price from cost price and margin?

Divide the cost by 100 minus your target margin, then multiply by 100. For a ₦800 item and a 30% margin: ₦800 ÷ 70 × 100 is about ₦1,143, which you might round to ₦1,150.

Should I raise the price of old stock when my supplier increases prices?

Many traders do, because the money from old stock must pay for the next restock at the new price. If you keep the old price, make sure you still collect enough to restock.

Does falling inflation mean my costs will come down?

Not usually. Falling inflation means prices are rising more slowly, not that they are dropping. Keep checking your own restock prices, because they can move differently from the national figure.