Cost-Plus Pricing

A pricing method in which the selling price is set by evaluating all variable costs a company incurs and adding a markup percentage to establish the price.

Deeper Insights

Many clothing retailers use this method to price the merchandise in stores. Generally, they figure out the overall cost they incurred to make a shirt and take a percentage of that cost to set as the markup value. Pricing like this is focused on covering all costs, which doesn’t take into consideration what customers value in the product.

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Related Keywords: Value-Based Pricing, Competitor-Based Pricing, Dynamic Pricing, Premium Pricing