Pricing strategy: definition, example, and why it matters
Three approaches: cost-plus (your cost + markup), value-based (what the customer will pay), competitive (match the market). Most trades use cost-plus for parts and value-based for skilled labor.
Short definition. How a business sets the prices it charges for goods and services.
Category. Pricing strategy is a business term used by service businesses when billing customers.
How Glo Invoice handles it. Glo Invoice builds pricing strategy into the invoice itself, so you don't track it on paper or in a spreadsheet.
Frequently asked questions
What does pricing strategy mean?
Three approaches: cost-plus (your cost + markup), value-based (what the customer will pay), competitive (match the market). Most trades use cost-plus for parts and value-based for skilled labor.
Related terms
Markup — The percentage added to your cost to determine the customer-facing sell price.
Gross margin — Profit as a percentage of the sell price (price − cost) ÷ price.
Labor rate — The hourly rate billed for skilled labor — distinct from a tech's actual wage.
