Pricing strategies are determined by factors like market conditions, consumer demand, and your cost of goods sold

Pro: You can maintain market share in a competitive market and attract customers who are interested in paying slightly less than your competitors’ rates.
Con: You need to diligently watch average market prices to maintain a competitive advantage for price-conscious consumers.
Example: A landscaping company  compares its prices to local competitors and sets its prices below the market average to attract price-sensitive customers.

8. Cost-plus pricing

Cost-plus pricing involves taking the amount it cost you to make the product and increasing that amount by a set percentage to determine the final price. You can work backwards to determine your markup percentage by first figuring out how much you want to profit from each product sold.
Pro: Profits are more predictable since you’re setting your markup price to a fixed percentage.
Con: Since this approach doesn’t account for external factors, like your competitors’ pricing, or market demand, you may miss out on sales if you set your markup percentage too high.
Example: A pizza shop adds up the cost of its ingredients and labor, then sets the pizza price to receive a 20% profit margin.

9. Dynamic pricing

Dynamic pricing matches the current market demand for a product. This pricing strategy most often occurs when the product at hand fluctuates on a daily or even hourly basis. Industries like hotels, airlines, and event venues set different prices daily and apply this strategy to maximize profits.