14 common pricing strategies in 2026 to help you set your prices

You know that setting prices for your small business is critical to your financial success. Determining a pricing strategy is the way to attract customers and meet profit goals.

With the holidays ahead and economic conditions shifting throughout 2025, it's a good time for small business owners to revisit both short- and long-term pricing strategies. Tariffs have significantly impacted two-thirds (68%) of small businesses this year, with product-based businesses (71%) feeling the pain more acutely than service businesses (57%), the 2025 Holiday Shopping Report from Intuit QuickBooks found.

In response, some small businesses have been passing the higher costs on to customers by raising prices (32%), while a nearly equal number (30%) have been absorbing the increased expenses themselves, the survey found. As it is, a whopping 93% say their 2025 holiday sales are vital to their success this year.

Whether you’re starting a new business or you’ve run your small business for years, the current economic climate and emerging pricing trends warrant a re-evaluation of your pricing strategy. Explore common pricing strategies that can help you ensure profitability, then learn how to choose the best ones for your business.

Read this article from top to bottom, or use the jump links to navigate:

• What are pricing strategy trends in 2026?
• Why is it important to choose a pricing strategy?
• What are common pricing strategies for small businesses?
• How do I choose the right pricing strategy for my business?
• Run your business with confidence

What are pricing strategy trends in 2026?

Three key trends are emerging for small businesses in 2026:

1. AI-driven dynamic pricing: Artificial intelligence (AI) tools can use real-time analytics to adjust prices based on demand, inventory, and competitor activity. This can maximize revenue and profit margins quickly.
2. Subscription or usage-based models: Many businesses are moving beyond one-time sales by packaging products or services into recurring subscriptions or tiered plans. This stabilizes cash flow, builds loyalty, and offers upsell opportunities.
3. Impact from inflation: Overall inflation rose to 3% as of September 2025, the U.S. Bureau of Labor Statistics reported, and 60% of small businesses reported in the second quarter Small Business Index that they raised prices in the past year as a result of inflation.

Staying nimble and reviewing your pricing strategy at least once a year is essential for sustaining growth amid fluctuating costs and emerging technologies.

Why is it important to choose a pricing strategy?

Pricing isn’t just about covering costs—it's a tool for communicating your brand’s quality, positioning your business in the market, and influencing potential customers' purchasing decisions. Setting your small business's pricing strategy shapes customers' confidence in and perception of your brand. 

A strong pricing strategy convinces customers to buy, portrays the value of your brand, and builds trust in your product or service. When your prices are intentional and aligned with your goals—whether that means competitive, value-based, or premium pricing—you create clarity and ensure profitability for your business.

What are common pricing strategies for small businesses?

There are many pricing strategies that small businesses commonly use—we're covering 14 of them in this article. The five most common pricing strategies are:

• Penetration pricing: Aims to attract buyers by offering lower prices on goods and services than competitors.
• Value-based pricing: Sets prices based on the value the customer finds in the product or service you’re offering.
• Price skimming: Sets rates high during a product’s initial phase, then gradually lowering prices as competitors appear on the market.
• Cost-plus pricing: Marks up the cost of services and goods by adding a fixed percentage to arrive at your selling price.
• Competitive pricing: Sets your prices to either match or beat your competitor’s similar products.

1. Penetration pricing

Best for: Businesses that want to build brand loyalty and reputation.

Penetration pricing strategy aims to attract buyers by offering lower prices on goods and services than competitors. This growth strategy draws attention away from other businesses and can help increase brand awareness and loyalty, which can lead to long-term customer relationships. 

Penetration pricing can be risky because it can result in an initial loss of income for your business. Over time, however, increasing brand awareness can drive profits and help small businesses stand out from the crowd.

In the long run, after penetrating a market, business owners can increase prices to better reflect the product’s position within the market.

2. Economy pricing

Best for: Businesses that want to keep their overhead costs low.

Economy pricing aims to attract the most budget-conscious consumers. Many businesses use this strategy for setting prices, including generic food suppliers and discount retailers.

This no-frills approach minimizes marketing and production costs as much as possible. Because of the lower cost of expenses, companies can set a lower sales price and still turn a profit.

3. Premium pricing strategy

Best for: Businesses with a competitive advantage that can charge a higher price.

With a premium pricing strategy, businesses set prices higher because they have a unique product or brand that no one can currently compete with. You should consider using this strategy if you have a considerable competitive advantage and know that you can charge a higher price without being undercut by a product of similar quality.

Because customers need to perceive products as being worth the higher price tag, a business must work hard to create a perception of value. Along with creating a high-quality product, business owners should ensure that the product’s packaging, the store’s decor, and the marketing strategy associated with the product all combine to support the premium price.

4. Price skimming

Best for: Businesses that have products in high demand.

Price skimming is a type of dynamic pricing strategy designed to help businesses maximize sales on new products and services. It involves setting rates high during a product’s initial phase, then gradually lowering prices as competitors appear on the market.

5. Psychological pricing

Best for: Businesses looking to meet short-term goals with quick wins. 

A psychological pricing strategy refers to techniques marketers use to encourage customers to respond based on emotional impulses rather than logical ones.

Consumers tend to give more attention to the first number on a price tag than the last. Psychology pricing aims to increase demand by creating an illusion of enhanced value for the consumer.

6. Bundle pricing 

Best for: Businesses that make a profit while offering a lower price than competitors.

With bundle pricing, small businesses sell multiple products for a lower rate than selling each item individually. Customers feel as if they’re receiving more bang for their buck. Many small businesses implement this strategy at the end of a product’s life cycle.

Small business owners should keep in mind that the profits they earn on higher-value items must make up for the losses they take on the lower-value product. They should also consider how much they’ll save in overhead and storage space by pushing out older products.

7. Geographical pricing

Best for: Businesses selling in significantly varied locations.

Geographical pricing involves setting a price point based on the location where a product or service is sold. Factors to consider in setting location-based prices include:

• Taxes and tariffs
• Shipping costs
• Cost of living
• Commercial rent prices
• Supply and demand

If your business expands across state or international lines, consider geographical pricing to be sure you aren't losing out on potential profits.

8. Promotional pricing

Best for: Businesses that want to generate quick demand for their products or services. 

Promotional pricing is another competitive pricing strategy that offers discounts on a particular product. These strategies are common during a holiday, like Black Friday, Cyber Monday, or Memorial Day weekend. Business owners can generate buzz and excitement about a product by offering short-term deals.

Promotional pricing campaigns often consist of short-term efforts and incentivize customers to act before it’s too late.

9. Value-based pricing

Best for: Businesses that specialize in software as a service (SaaS) or subscriptions.

Value-based pricing is a way of setting your prices based on the value the customer finds in the product or service you’re offering. It's a customer-centric strategy that goes beyond figuring production costs to determine the final price.

This approach recognizes that customers don’t mind how much or little a product costs a company to make, so long as the consumer feels they’re getting ‌excellent value by purchasing it.

10. Captive pricing 

Best for: Businesses with a product that customers continually renew or update.

Captive pricing is a strategy used to attract a high volume of customers to a product intended for a one-time purchase. The method behind captive pricing is to generate profits from added accessories that complement your core product. 

Small businesses can implement price increases so long as the cost of the secondary product does not exceed the cost that customers would pay a competitor.

11. Dynamic pricing

Best for: Businesses looking to maximize their profit margins and boost declining sales.

Dynamic pricing is when you charge different prices depending on who is buying your product or service or when they buy it. It’s a flexible pricing strategy that considers many factors—particularly changes in supply and demand.

While dynamic pricing is relatively common in e-commerce and the transportation industry, it doesn’t work for every type of business. The greatest risks can come when a business applies variable prices to products or services popular with price-sensitive customers.

12. Competitive pricing

Best for: Businesses that are starting up.

Competitive pricing strategy is when your prices either match or beat your competitor’s similar products. Often, this simply means setting prices lower for your products or services, but you could alternatively offer better payment terms for the same price.

To determine if this strategy is right for you, gather as much information as possible about your target market and what your competition is doing. If you combine this with advanced pricing software solutions, you can analyze and update price data continuously.

13. Cost-plus pricing

Best for: Businesses with a cost advantage.

Cost-plus pricing is a strategy of marking up the cost of services and goods by adding a fixed percentage to arrive at your selling price. It's one of the most common pricing strategies.

As a seller, you calculate your fixed and variable costs during manufacturing and then apply the markup percentage to that cost to make a profit.

14. Freemium pricing

Best for: Businesses that offer both free and paid versions of their product.

Freemium pricing is a strategy that combines both free and premium pricing. Usually, a service or product is given to a customer free of charge unless they want to access premium features or services within that product.

This strategy allows customers to use the basic features of your product and get a sneak peek of what the full package will offer them. Freemium pricing also allows customers to trust your business before making a purchase.

How do I choose the right pricing strategy for my business?

There isn't a one-size-fits-all answer to setting prices for small businesses. The right pricing strategy for your small business is going to depend on your products or services and what your goals are. There are five steps to choosing the pricing strategy that can provide the most value to your business.

1. Set an objective

Identify the business goal(s) you want to achieve. It might be increasing short-term profitability, penetrating new markets, or becoming a premium brand. Write it out to stay clear on your goal.

2. Identify your audience

Consider your buyer personas—the imaginary ideal customer you're trying to serve. Ask yourself and research: How much are they willing to pay? What are their pain points and habits? How much purchasing power do they have?

3. Determine your value proposition

Understand how you stand out from your competitors and what you have to offer to customers. Write out a clear statement of the value that you provide, whether it's affordability, luxury, or a one-of-a-kind solution.

4. Consider your costs

The costs to produce your product or service will affect your pricing potential. Evaluate how much each unit will cost, such as the cost of goods sold, packing, and shipping, to find a price that profits. Understand how to calculate your wholesale pricing before choosing pricing strategies for your products or services.

5. Analyze your data

Look at past pricing strategies and sales data to determine what works best for your business or how you can improve. To get this right, use financial reporting and insights.

For example, as a construction business, you’ll price your services based on labor and materials costs. However, you’ll need to consider what your competitors charge and whether you’re trying to penetrate the market. If you already have a competitive advantage, the premium pricing strategy could be an option. Otherwise, if you’re just starting, consider a penetration pricing strategy.

Should I charge more or less than my competitors?

Deciding whether you should charge more or less than competitors depends on what you’re selling, your target market, and your business goals. 

For example, if you want your business to expand into a new market, you may charge lower prices to attract new customers. Or if your competitors end up charging more than your business, you might want to consider increasing your prices. Revisit your prices and pricing strategies when your goals or the competitive landscape changes.

How often should I review my pricing strategy?

Review your pricing strategy at least once a year. You might want to review it sooner in the case of:

• A new competitor 
• Changes in laws that affect your product or service
• A need to quickly boost dropping sales

Be sure to keep an eye on your existing competitors’ pricing throughout the year to avoid overlooking changes in the market.

Remember that change doesn’t happen in a day—as you roll out your new strategy, be sure to start small so you can easily pivot if you make mistakes. Then, gradually ramp up your strategy.

Run your business with confidence

With these pricing strategies in mind, you can determine the best strategy for your business model. Whether your goal is to set foot in a new market or stand out from the competition, keeping track of relevant data and records is key to keeping the momentum going. 

QuickBooks makes it easy to monitor relevant sales data and manage cash flow in one place. This allows you to continually evaluate your pricing method so that you can make price changes in real time, grow your business, and improve customer success.