Fair market value (FMV) is the price a product, service, or asset would sell for on the open market, assuming both the buyer and seller are reasonably informed, willing, and under no pressure to complete the transaction. It represents a neutral, competitive price point based on supply, demand, and comparable offerings.

Example:

If most mid-market companies pay approximately $10,000/year for a CRM with similar features, that’s considered the fair market value. Offering a drastically higher or lower price may raise objections or trigger procurement review.