it takes is a bit of creativity and some good marketing. You should never have to just accept the prevailing price of a product. Price-takers get eaten up and spit out. Price-makers spend their vacations in Hawaii.   Myth # 3 - Pricing is a simple matter of taking the cost of your product or service and marking up your desired profit margin.   Truth - The fact is that most businesses dont know their costs, so even if they wanted to do cost-plus pricing they couldnt. If you dont know your cost how can you "mark up" your price? In addition, the cost-plus price may have nothing to do with the value you provide or the market price of your product or service.   Even though you may not be able to determine your price, you should be able to approximate it. Its better to be approximately wrong than to be precisely right. In any pricing scenario, you must know the approximate cost of your service so that if you are losing money, at least you know it and it is part of your strategy.   Myth # 4 - If sales are lagging just drop your price and sales will increase.   Truth - Just open the paper and count the number of times you read the word "sale." The truth is that people do put a high value on price but they also put a high value on quality, and when you lower your price you cheapen the perception of your quality.   If you lower your prices just to increase sales you should have a good reason. If you believe youll be able to up-sell your new customers or you believe that can "back-end" them with bigger offers, then your strategy is justifiable. But if you just lower your prices to increase sales you could be just speeding up your losses.   Price is a Perception of Value   Its important to remember that you must sell your product or service at a price that is higher than your cost to produce and promote it. Thats called a profit. But perhaps even more important is knowing this - your customer will only buy your product or service if they determine that its perceived value exceeds the price they have to pay to receive it. Price is about perception of value and has little to do with actual value. The whole goal of your marketing efforts is to spread the word and convince people that the value is higher than the price they are being asked to pay.   Ill never forget a story I once heard about a fellow who approached the legendary marketer/copywriter Gary Halbert to ask about the seemingly high price he was planning to charge for his new product. He asked Gary, "Do you think people will pay $XX dollars for my new widget?" Garys reply is profound and something you should always remember. He said, "I dont know. How good is the sales letter?"   I love this story because it summarizes everything that is great about the power of good