Pricing is one of the most important decisions you will make in your business. Get it wrong and you risk working too hard for too little or losing customers to competitors. Get it right and pricing becomes a growth engine that funds your vision and positions your brand with confidence.
The good news is that pricing does not need to be complicated. With a few proven methods, you can set numbers that make sense to your customers and keep your business profitable.
The three main pricing methods
Cost-based pricing
Work out your costs and add a margin on top. This protects profit but does not always reflect customer perception.
Market-based pricing
Look at what others charge for similar offers. It keeps you in range but can drag you into price wars.
Value-based pricing
Charge based on the results or transformation you deliver. If your product saves a company £10,000 a year, pricing it at £2,000 feels fair even if it only costs £200 to produce.
A quick pricing check
Add up your Materials, Packaging, Shipping, and Other Costs.
This gives you the Total Cost per Unit.
Set your target Sales Price.
Work out the Profit per Unit and Gross Profit Margin %.
Compare against competitor benchmarks.
Ask: does this reflect the value delivered?
If the answer is yes, you are in the right zone.
Example: Fitness equipment brand
A startup designs a premium adjustable dumbbell set.
Total Cost per Unit: £80 to manufacture and ship.
Sales Price: £249.
Profit per Unit: £169.
Gross Profit Margin %: 68%.
Competitor Price (Benchmark): £150–£300.
Value Delivered: replaces a full rack of weights, saving customers hundreds of pounds and valuable space.
This ensures the product is profitable, competitive, and clearly positioned in the market.
Free tool: Pricing and Finance Toolkit
We created a Pricing and Finance Toolkit to help you run these numbers with ease. It includes templates for product and service pricing, gross margin checks, and break-even analysis.
Beyond pricing
Pricing is not fixed. Review it every six to twelve months as your costs change and your brand grows. Confident pricing shows you understand your value and gives your customers confidence in you.
The Business Starter Kit includes the toolkit plus cash flow templates and a full launch roadmap so you can move from idea to income with clarity and confidence.
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