Cost-plus pricing sets the selling price by calculating an accepted cost base and adding a fixed amount or markup percentage. The method is straightforward, but the result is only reliable when the cost base includes the expenses the seller intends to recover.
Quick reference for Cost-plus pricing
| Check | What it means for the transaction |
|---|---|
| Category | Pricing and profitability |
| Record to keep | Record the cost basis, currency, quantity, customer scope, effective period and approval behind the amount when they apply. |
| Do not infer | A price label alone does not establish margin, landed cost or the final invoiced amount. |
Cost-plus pricing and nearby terms
- Landed cost: Landed cost is the total cost of obtaining a product and bringing it to the required location.
