How to Price Your Products

Pricing feels like a math problem, so most founders treat it like one: add up the costs, tack on a margin, done. That’s how you end up underpriced and invisible. Your price isn’t a calculation, it’s a statement. It’s the first and loudest thing your brand tells a customer, before she reads a word of your copy, and it decides who buys, how they feel, and whether your business makes money.

The rule that runs through this whole guide is simple. Cost sets the floor. Value and positioning set the number. By the end you’ll know how to find your floor, decide what your price should say, and land on a number you can defend, using real female-founded products from a $13 lipstick to an $11,300 handbag to show you exactly how the pros do it.

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Start with the floor: what it costs you

You can’t price anything until you know what it costs to make and deliver. That’s your cost of goods sold, the materials, packaging, and production per unit. It’s the floor, the price below which you lose money, and it’s the one number pricing actually requires.

New founders miss what happens at wholesale. If you’ll ever sell through a store, not just your own site, the retail math doubles up. A retailer buys from you at roughly half the retail price, and the keystone markup happens twice on the way to the shelf, so your cost of goods needs to be around a quarter of the final retail price for the numbers to work in both wholesale and direct-to-consumer. If your product costs $15 to make, a $30 retail price leaves you nothing once a store takes its half. Build that in before you fall in love with a number.

Cost-plus pricing, marking up from your cost, gives you the floor. It doesn’t give you the answer, because it ignores the only thing that actually decides your price: what the product is worth to the person buying it.

The three ways to price

Cost-plus. Add a markup to your cost. It’s safe and simple, and it almost always leaves money on the table, because it prices off your spreadsheet instead of your customer.

Competitive. Price relative to the other products your customer is choosing between. This tells you the going rate and where you’d sit on the shelf, which matters, but it makes your competitors set your price.

Value-based. Price on what the product is worth to the customer, the result it delivers, the identity it confers, the story it carries. This is where brands make real margin, and it’s how nearly every product below is priced. The difference between a $13 lipstick and a $105 face cream is almost never the difference in what they cost to make.

Your price is a message

A price is a signal, and customers read it instantly. A low price says accessible, practical, value. A high price says premium, effective, exclusive. This is why underpricing is so dangerous: a price that’s too low doesn’t just cost you margin, it tells the customer your product isn’t very good. Past a certain point, raising a price can actually increase sales, because people use price as a shortcut for quality.

The best way to understand this is to look at what real prices are saying. Here are nine female-founded products, from cheapest to a true luxury icon, and the logic behind each number.

What the price is really saying, from $13 to $11,300

The Lip Bar lipstick, $13: a full breakdown

Melissa Butler built The Lip Bar as a vegan, Black-owned brand around accessible, inclusive color, and the $13 price isn’t a compromise, it’s doing real work.

The price is the mission. The brand exists to serve a customer the industry overlooked, and the low number keeps the product within her reach. Cheap here is a promise being kept, not a corner being cut.

It’s built for volume, not margin per unit. Thirteen dollars is priced to move in quantity through mass retail like Target, where a thin margin per lipstick is made back in scale. A low price at high volume can out-earn a high price at low volume.

It lowers the barrier to trying a new brand. Thirteen dollars is an easy first yes, and easy first yeses are how a challenger brand builds a customer base fast.

Value is a position, not a default. Priced this way on purpose, cheap signals “for everyday, for everyone,” not “lesser.” The number matches exactly who the brand is for.

Rhode Peptide Lip Treatment, around $18. Rhode (Hailey Bieber) prices its hero low enough to be an impulse and high enough to feel prestige, the classic low-risk first taste of a brand built to sell you ten more things.

Glossier Boy Brow, around $19. Glossier built an aspirational, cult brand, then priced its heroes to stay within reach of the young customer who aspires to it. The gap between how premium the brand feels and how affordable the product is turns a customer into an evangelist.

Rare Beauty Soft Pinch Blush, $23: a full breakdown

Rare Beauty (Selena Gomez) prices its hero blush at about $23, a number engineered to be the easiest possible yes at Sephora.

It sits in the impulse-buy zone. Under $25 at Sephora is add-to-cart-without-thinking territory: expensive enough to feel prestige, cheap enough that a fan doesn’t stop to deliberate.

It’s a gateway into the brand. The hero is priced as customer acquisition, the low-risk first purchase from a full range built to sell you many more things once you’re in.

It threads accessibility and quality. High enough to signal the product is good, low enough that the huge celebrity fanbase won’t hesitate. The single number does both jobs at once.

It’s priced for the fanbase and the channel. With a massive built-in audience and the Sephora shelf, volume at $23 beats prestige margin at $60. The price is chosen for reach, not for the biggest cut per unit.

Summer Fridays Jet Lag Mask, around $49. Summer Fridays (Marianna Hewitt and Lauren Gores) sits in masstige, the “affordable luxury” tier. Fifty dollars is a considered purchase, not an impulse, so it signals a treat worth choosing while staying below true prestige skincare.

Westman Atelier foundation stick, around $70. Westman Atelier (celebrity makeup artist Gucci Westman) prices as clean luxury. The number signals artistry and a premium clean formulation, and it sits deliberately alongside legacy prestige makeup, because that’s the company it wants to keep.

Charlotte Tilbury Magic Cream, $105: a full breakdown

Charlotte Tilbury’s Magic Cream sells for $105 for 50ml, and it’s the clearest lesson in the guide, because its price has almost nothing to do with what the cream costs to produce. The $105 is built on four things, and not one of them is the cost.

The origin story does the heavy lifting. Magic Cream was Tilbury’s backstage secret, the cream she used for over a decade to revive the tired, dry, flight-wrecked skin of celebrities and supermodels before their makeup went on. You’re not buying a moisturizer, you’re buying the makeup artist’s private tool. That story is worth far more than the ingredients.

Celebrity proof and social proof justify the number. It arrives wrapped in famous names and the line that the brand sells one jar every minute. When a product is visibly adored by the people whose faces you envy, $105 stops feeling expensive and starts feeling like access.

It does two jobs, which reframes the value. Magic Cream is a moisturizer and a makeup primer at once, famous for making foundation sit better. A product that replaces two is easier to justify at a higher price.

It’s positioned as the smart luxury, on purpose. At $105 it sits well below iconic prestige creams like La Mer at $200 and up, so it reads as the clever, in-the-know choice, while sitting far above any drugstore cream, so it still feels special. That middle slot is a deliberate position, not an accident. The price sells the story, and the story justifies the price.

Vintner’s Daughter Active Botanical Serum, around $234. April Gargiulo priced her serum in ultra-premium indie territory, and the justification is craft and scarcity. The brand leans on a small-batch, slow, obsessive production process and a dense blend of botanicals, and the price makes that obsession legible. At this level you’re paying for the founder’s refusal to compromise, and the number is part of how you know it.

Chanel Classic Flap, $11,300: a full breakdown

At the very top, the price is the product. The Chanel Classic Medium Flap, from the house Coco Chanel built, has climbed from roughly $4,900 a decade ago to about $11,300 today, and nobody prices it on leather and labor, which are a fraction of the number. Every reason for the price is about meaning.

Scarcity is engineered. Chanel raises prices and limits supply on purpose, keeping the bag just out of reach so demand always runs ahead of it. The exclusivity is the value, and the high price is how it’s enforced.

The rising price protects resale value. Because Chanel keeps lifting the retail price, the bags tend to hold or gain value on the secondary market, so buyers treat them as investments rather than purchases. That reputation makes paying $11,300 new feel rational.

It’s a Veblen good. Demand rises with the price instead of falling. People want it more because it costs more, so the number itself is the appeal, a status signal that only works precisely because it’s high.

You’re buying heritage. The Classic Flap descends from Coco Chanel’s 2.55, a nearly century-old icon, so the price includes a piece of fashion history and a form of membership that almost no amount of marketing can manufacture.

The lesson is the extreme version of everything above: as you climb the price ladder, cost matters less and meaning matters more. Chanel is what “your price is positioning” looks like taken all the way.

The psychology of the number

The exact digits send a signal too, so choose them to match your position.

Charm pricing versus round numbers. Prices ending in .99 ($12.99) read as value and deal, which is why mass and budget brands use them. Whole, round numbers ($105, $234) read as confident and premium. Notice that no prestige brand prices its cream at $104.99. The rounding is part of the positioning.

Anchoring. Show a more expensive option next to the one you want to sell, and the target suddenly looks reasonable. A $105 cream feels fair sitting beside a $200 one. Put your hero next to a higher tier on purpose.

Good-better-best tiers. Offering three versions at three prices lets customers self-select, and most choose the middle, which you can design to be your best margin. Tiers also make a single price feel like a choice rather than a demand.

Price for where you sell

Your price has to work in the channel you sell through. On your own site you keep the full price, but the moment you wholesale, the retailer takes roughly half, so your retail price has to be high enough to survive that split and still leave you a margin. If you sell both direct and through stores, don’t undercut your retail partners on your own site, because a retailer will drop a brand that competes with it on price. Set one honest retail price and hold it everywhere.

How to price your own product

Find your floor. Add up your true cost per unit, and if you’ll ever wholesale, make sure your cost is around a quarter of your intended retail price. That’s the lowest you can responsibly go.

Decide what your price should say. Before you pick a number, decide your position: are you the accessible, mission-driven pick like The Lip Bar, the affordable-luxury treat like Summer Fridays, or the prestige object like Charlotte Tilbury? Who your customer is and how you want her to feel decides the tier, and the tier decides the number.

Look at your neighbors. Find the products your customer is choosing between and see where they sit. You’re not copying them, you’re learning the shelf so you can place yourself on it deliberately.

Price on the value, then round to fit. Ask what the result is worth to your customer, not what it cost you, and set the number there. Then round it to match your positioning, .99 for value, a clean whole number for premium.

Lean higher than feels comfortable. Underpricing is the most common and most damaging mistake founders make, because it starves your margin and signals to customers that your product is cheap. You can almost always lower a price later, but raising one reads as a problem. Start at the top of what your positioning can support, then test.

Common mistakes

Underpricing out of fear. The instinct to be the cheap option kills more brands than being too expensive ever has. A price too low signals low quality and leaves you no room to run a business.

Pricing only from cost. Cost-plus gives you a floor, not a price. Ignoring what the customer will pay leaves your best margin on the table.

Forgetting the retailer’s cut. A price that works direct-to-consumer can lose money at wholesale. If stores are in your future, price for the keystone-times-two reality now.

Competing on price. Racing to be cheapest is a race you can only win by losing margin. Compete on the story and the result instead.

Being afraid to charge premium. If your product genuinely delivers and your brand supports it, a higher price often sells more, not less. Charlotte Tilbury didn’t get to $105 by being timid.

Frequently Asked Questions

How do I price a product?

Start with your cost of goods to find the floor, the lowest you can go without losing money, and remember that if you’ll wholesale, your cost should be about a quarter of the retail price. Then set the actual price on value, what the product is worth to your customer and how you want to be positioned, not on cost alone. Finish by rounding the number to match your tier and testing it.

What is the difference between cost-plus and value-based pricing?

Cost-plus pricing marks up from what the product costs you to make. Value-based pricing sets the number on what the product is worth to the customer, the result, the story, the identity it carries. Cost-plus gives you a safe floor but usually leaves money on the table. Value-based pricing is how brands earn real margin, and it’s why a $105 cream and a $13 lipstick can cost nearly the same to produce.

Should I price my product high or low?

It depends on your positioning, but founders far more often price too low than too high. A low price signals accessibility and value, a high price signals quality and prestige, and past a point a higher price can increase sales because customers read price as a quality cue. Underpricing starves your margin and undersells your product, so if you’re unsure, lean higher and test.

How do I price for wholesale?

Price so the product is still profitable after a retailer takes roughly half. Because the keystone markup happens twice on the way to the shelf, your cost of goods needs to be around a quarter of the retail price to leave margin in both wholesale and direct channels. Set one retail price and don’t undercut your retail partners on your own site.

Is it bad to be the cheapest option?

Only if cheap isn’t your strategy. For a mission-driven, high-volume brand like The Lip Bar, an accessible price is the strategy itself and a real advantage. For most brands, though, being the cheapest signals low quality and traps you in thin margins, so it should be a deliberate position, never a default you back into out of fear.

Sources

• Charlotte Tilbury, “Charlotte’s Magic Cream”. The $105 price for 50ml and the backstage origin of the product.
• Cosmopolitan, “Charlotte Tilbury Magic Cream Review”. The backstage-to-icon story and the “one jar sold every minute” claim.
• Sotheby’s, “Understanding the Latest 2025 Chanel Bag Price Hikes”. The Classic Medium Flap at $11,300 and Chanel’s price-increase strategy.
• Shopify, “How To Calculate Wholesale Product Pricing”. Cost, markup, and the wholesale-versus-retail pricing math.