Pricing Strategy Calculator
Free pricing strategy calculator. Enter your costs, desired margin, competitor price, and value differentiation score to see all three pricing methods compared side by side. Understand how each method affects your margin and find the optimal price for your product or service.
Your direct cost to deliver this product/service
Used for cost-plus pricing
Average price in your market
On par with competitors
Enter your COGS, desired margin, and competitor price to compare pricing strategies.
Frequently Asked Questions
What is cost-plus pricing?
Cost-plus pricing sets your price by adding a fixed profit margin to your cost of goods or services. Formula: price = cost / (1 - desired margin%). For example, if your cost is £50 and you want a 40% margin, your price is £50 / 0.6 = £83.33. It is simple and ensures you always cover costs, but ignores what customers are willing to pay.
What is value-based pricing?
Value-based pricing sets the price based on the perceived value to the customer, not your costs. If your product saves a customer £5,000 per year, you can charge more than a competitor whose product saves them £1,000. This method maximises revenue but requires deep understanding of your customer's willingness to pay and alternatives available to them.
Which pricing strategy should I use?
Use all three methods together. Cost-plus sets your floor (you cannot price below this sustainably). Competitor-based sets market context. Value-based shows your ceiling. The ideal price is above your cost-plus floor, close to or above competitor price if you offer more value, and below your value-based ceiling. Most profitable businesses use value-based pricing as their primary strategy.
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