Business & Freelance

How to Price Your Products: Cost-Plus, Value-Based and Competitive Pricing

Learn three proven pricing strategies and how to calculate a price that covers costs and earns a healthy margin.

3 min read · Updated 2026-10-03

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.

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