There are a number of different approaches to pricing. What you described as cost + profit margin is often called bottoms-up pricing.
Other methods include interviewing customers to determine how much value they derive from your product, then assigning a hard price to that value. Another popular approach is to benchmark product against those of your competitors, and base your price on theirs while adjusting for any additional value your product offers.
My ebook describes pricing strategies for small businesses
in greater detail if you`re interested in specific tactics you could employ.
Fundamentals for Founders
The Practical Guide to Kick-Starting Your Business