Price points

Ask Me Anything Q&A Trueprofitaprilama
1

Hello,

I have a few questions to ask and hopefully you can help me with them all.

How much should we be marking our products up by i.e x3 x4 x5. Is there a certain number we should aim for?

Also is it still better to price at .99 price point as opposed to a whole number?

Final question, could you give me some insights and your thoughts on discounts for a premium brand.

2

Thanks @MIIKOA — happy to dive into your questions!

Is there a certain price markup rate we should aim for?

Yes! A solid benchmark is:

Price = Product Cost × 2.5

Why 2.5?

Because 2.5x gives you around 60% gross profit margin. Formula: Profit Margin = (1 - 1/Markup) × 100%

That’s a healthy margin to cover ads, taxes, platform fees — and still leave you with decent net profit.

Is it better to price at $9.99 instead of $10.00?

Absolutely. $9.99 feels cheaper, even if it’s only 1 cent lower. It’s a classic tactic used by big and small brands alike — no reason not to use it.

Thoughts on using discounts for a premium brand?

Just because you’re premium doesn’t mean you can’t run discounts — you just need to do it tastefully. Here’s a simple checklist:

What to avoid:

  • Constant or storewide discounts: Hurts your brand perception
  • Loud, aggressive promos: Stuff like “CRAZY 90% OFF” feels cheap
  • Sale-heavy visuals: Avoid big red banners screaming “SALE!”

What to do instead:

  • Run limited-time offers on select products — ideally tied to a fixed date (like your “brand day”)
  • Use clever, brand-aligned copy — something witty, subtle, or emotional that feels true to your brand
  • Think of the offer as a reward, not a push

That way, you create urgency without damaging your premium image. Let me know if you want more examples or help tweaking your offers!

3

One thing I’d add is to be careful not to treat markup and margin as the same percentage.

A 2.5x selling price means the price is 150% above cost, but the gross margin is 60%.

For example, if a product costs 100:

  • 2x price = 200 → 100% markup, 50% margin
  • 2.5x price = 250 → 150% markup, 60% margin
  • 3x price = 300 → 200% markup, 66.7% margin

I find it easier to decide what gross margin the business needs first, then calculate the selling price backwards from that rather than picking an arbitrary x2/x3/x4 multiplier.

The other important part is what you use as “cost”. If freight, duties, packaging or other landed costs materially change the real cost, using only the supplier unit price can make the margin look healthier than it really is.

For a premium brand I’d probably treat the target margin as a commercial decision based on category, acquisition cost and positioning rather than assuming there is one correct markup multiple.