The relationship between cost, price, and value affects company growth. The margin between price and cost drives sales, while the gap between price and value incentivizes customers to buy. Pricing can be determined through cost plus or value-based approaches.

When you price something, there's actually like 2 other factors at play.

There's the cost, there's the price, and then there's the value.

And the interplay and relationship between these items affects how growth happens inside of your company.

Now the gap between price and cost, that is your margin, that is your incentive to sell.

The bigger that gap is, the more you are driven to want to push your product to your customers.

This gap here between price and value is incentive to buy.

And the larger that gap is, The easier it is to have your customers to want to sign up or use your product.

To figure out price, there's really 2 ways to go about it.

You either start with the cost and you figure out where your price is based off of that.

The other way to do it is figure out what is the value of your company or product or service, and then you figure out your price from that.


Speaker 0: When you price something, there's actually like 2 other factors at play. There's the cost, there's the price, and then there's the value. And the interplay and relationship between these items affects how growth happens inside of your company. Now the gap between price and cost, that is your margin, that is your incentive to sell. The bigger that gap is, the more you are driven to want to push your product to your customers.

This gap here between price and value is incentive to buy. And the larger that gap is, The easier it is to have your customers to want to sign up or use your product. To figure out price, there's really 2 ways to go about it. You either start with the cost and you figure out where your price is based off of that. That is called cost plus.

The other way to do it is figure out what is the value of your company or product or service, and then you figure out your price from that. And that is called value-based pricing.

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The best way to price any product