Never price based on competitor prices alone — your costs may be very different. A competitor with a warehouse deal or higher order volume can profitably undercut you at a price that would bankrupt you.
The premium price option is often more profitable at lower volume. Selling 200 units at a 45% margin can beat selling 500 units at 20% — and with far less operational complexity.
Price anchoring works. Showing a higher "original" price alongside your selling price increases perceived value and conversion rate, even when both prices are yours.
Factor in ad spend before setting price, not after. If you plan to run paid ads, your break-even price must include CAC — otherwise you'll set a price that only works organically.