There are "mark-up formulas" that we often talk about and use in business. For example, for direct-response marketing, we look for a 8X to 10X mark-up. In traditional distribution through retail, there tends to be a 20% to 1X (100%) mark-up from mfg cost to wholesale, and a 1X mark-up from wholesale to retail. But the most important thing to keep in mind is that these are MINIMUM mark-ups. The entrepreneur's job is to get the maximum possible mark-up for himself as well as for his re-sellers. So "what the market will bear" is the ultimate determinate of price.
Some products are much more "price elastic" than others, based on a myriad of factors, including relative uniqueness, scarcity, perceived value, market responsiveness, and so forth. Testing and pushing that elasticity is important.
Sometimes guilt limits price. With "information products", for example, somebody'll say: how can you charge $100 for a book that only costs you $1.00 to make? But with such products, there's no relationship whatsoever between manufactured cost and price, because the value to the end user is not based on the thing but on the information contained in the thing.
Methods of marketing and distribution have a great affect on price. Information in book form, sold through bookstores, may be saleable at $10 to $30, yet that very same information packaged differently for sale through directmail may support a price of $100 to $300. If that same information is delivered through a seminar: $1,000.00 to $3,000.00.
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