How do you set a price for your product or service?

Recently I spoke with all kinds of business owners; pottery, printed t-shirts, dog treats, recording studio time, band gigs, and website development, about why and how they come up with their retail prices.

• Pricing based on manufacturing costs, or wholesale price and then doubled, tripled...
• Hourly rates based on how comfortable one feels about "throwing the rate out there".
• Prices based on what their competition has on their sticker.
• A fixed quote that is has been honed through experience.
• Prices that get each band member a small amount, but not enough to live on.

It's always interesting to hear other opinions to see if you could be doing it differently. I came across episode #3 Price is Right? of the "Open for Business" podcast by Gimlet Creative and eBay. Here's a quote from the transcripts to get you motivated to listen. "This brings us to lesson two: don’t set a price based on what it costs you to make something. Instead, set the price based on what your customers think that thing is worth. This is what Mickey calls 'value-based pricing.'"

Comment below and let us know how you come up with your price.