How do I balance competitive pricing with profitability?

As an e-commerce business owner, I'm struggling to find the right pricing strategy that keeps me competitive in the market while ensuring I maintain healthy profit margins. I've noticed that aggressive discounting can attract customers, but it often cuts too deeply into my revenue. I need a sophisticated approach that allows me to price strategically, understand my true costs, and create perceived value without constantly racing to the bottom. How can I develop a pricing model that attracts customers, maintains profitability, and differentiates my brand?