Pricing is one of the fastest levers on profit. Too low and you work hard for little; too high and sales stall.
Cost-plus pricing
Add a markup to the full cost of making and selling the item. A product costing $24 with a 60% markup sells for $38.40. Include materials, labor, packaging, fees, shipping and a share of overhead in your cost.
Value-based and competitive pricing
Value-based pricing sets price by what the product is worth to the customer, which can justify a higher price than costs suggest. Competitive pricing benchmarks against rivals. Many businesses blend these approaches.
Test and refine
Run small price tests, track conversion and margin and watch customer feedback. A small price increase of 5% can raise profit significantly if volume holds. Make sure your price leaves room for discounts and returns.
Try the numbers
Use our Markup & Margin Calculator to see this in practice. With its default example (Unit cost: $24.00; Set price by: Markup %; Percent: 60%), it shows selling price: $38.40. Adjust the inputs to match your situation.
Key takeaways
- Include all costs in your pricing math.
- Value-based pricing can beat cost-plus.
- Test price changes and measure the result.
This article is for general education and is not personalized financial, tax or legal advice. Rules and limits change; confirm current figures with official sources such as IRS.gov, SSA.gov and StudentAid.gov, or consult a qualified professional. © 2026 FinanzCalc.