Three ways to set a price

  • Cost-plus: add a margin on top of your costs. Simple, but ignores what customers will actually pay.
  • Market-based: price relative to competitors. Easy to research, but risks a race to the bottom.
  • Value-based: price according to the value the customer gets. The most profitable, but requires understanding your customer.

Always know your cost floor

Whatever method you favour, first calculate what each product truly costs you: materials, packaging, shipping, payment fees and a share of your overhead. Selling below this floor loses money on every unit. Many starters forget the hidden costs and accidentally price below cost.

Understand your margin

Your margin is what is left after costs. A healthy margin gives you room to invest, absorb mistakes and survive quiet periods. Thin margins make a business fragile; one bad month can sink it.

Compete on more than price

Being the cheapest is a hard, lonely game; someone can almost always go lower. Compete on quality, service, speed or experience instead. Customers happily pay more when they feel they get more.

Test and adjust

Pricing is rarely right first time. Launch, watch how customers respond, and adjust. Raising a price a little often barely affects sales but greatly improves profit. Be willing to experiment.

Tip: when in doubt, price on the high side. It is far easier to lower a price later than to raise one, and a too-low price can signal low quality.

What comes after this

Further along the same line: Setting Your Freelance Rate in the Netherlands (2026), Day Rate or Project Price and Setting Up a Subscription Model.