Free Tool · Interactive

Value-Based Price Calculator

Cost-plus asks one question and stops. This asks all 3: what the product costs you, what it is worth to the customer, and where your differentiation puts you between the two. Enter your numbers and the answer updates as you type. Nothing is sent anywhere, the maths runs in your browser.

Your Cost, and Your Habit
The cost you would mark up, and the percentage you habitually add. Together these are your cost-plus price.
What the Market Says
The ceiling. What the product earns them, saves them, or what their next best alternative costs.
How much the value varies from customer to customer, or how uncertain your estimate is. At ±25%, about two in three customers value it between $113 and $188.
What a strong rival charges for the same function.
Where You Deserve to Sit
0% is a pure commodity sitting on the floor, 100% is capturing all the value. A differentiated product sits high. Add volume and you get the annual number too.
Reset to example numbers
Money left on the table
$46.00

Per unit, against the competitor's price.

The three anchors
Floor, your cost$60.00
Your cost-plus price$84.00
Competitor price$130.00
Ceiling, customer value$150.00

Your margin per unit $24.00
Competitor margin per unit, same cost $70.00
Where cost-plus put you, floor to ceiling 26.7%
Where the competitor sits 77.8%
A price set from value instead
At the position you set
$127.50

Customers who still buy
73 of 100
Contribution against cost-plus
+112%
Best price at this uncertainty
$132
keeps 68 of 100
What each customer would pay for your product
What each of 100 plausible customers would pay, against your priceEach dot is one of 100 plausible customers, placed at what they would pay for the product: the $150 ceiling, give or take 25% for about two in three of them. At your price of $127.50, 73 of 100 still buy and 27 are lost.$0$50$100$150$200$250Value to the customerYour priceWhat each of 100 plausible customers would pay, against your priceEach dot is one of 100 plausible customers, placed at what they would pay for the product: the $150 ceiling, give or take 25% for about two in three of them. At your price of $127.50, 73 of 100 still buy and 27 are lost.$0$100$200Value to the customerYour price
  • Still buys
  • Lost
Contribution against price
Contribution per 100 customers against priceContribution per 100 customers at each price from your $60 cost. The cost-plus price, $84, earns $2,306; the competitor charges $130, and the ceiling is $150. At your price, 73 of 100 customers still buy, and contribution is 112% above cost-plus. With values this uncertain, the best price is $132, which keeps 68 of 100.$100$150$200$250$0$2k$4k$6kContribution per 100 customersPriceCost-plusCompetitorBest priceContribution per 100 customers against priceContribution per 100 customers at each price from your $60 cost. The cost-plus price, $84, earns $2,306; the competitor charges $130, and the ceiling is $150. At your price, 73 of 100 customers still buy, and contribution is 112% above cost-plus. With values this uncertain, the best price is $132, which keeps 68 of 100.$100$150$200$250$0$2k$4k$6kContribution per 100 customersPriceCost-plusBest price
  • Your price
  • At the cost-plus price
  • Beats cost-plus

At your price, 73 of 100 customers still buy, and contribution is 112% above cost-plus. With values this uncertain, the best price is $132, which keeps 68 of 100.

Each dot is one plausible customer, and their value already allows for the competitor's offer, so a price above the competitor can still sell. The chart shows what your inputs imply, not which customers to give up.

The thinking behind this tool: Cost-Plus Pricing Is a Confession →
It works through a component priced at cost plus 40%, giving $84, against a rival charging $130 for the same function and outselling it.

Estimating the ceiling is the hard part, and it is the part this tool takes as an input rather than answers. Start a conversation →