Definition
Cost-plus pricing is the pricing strategy that adds a markup to the cost of producing a product. It belongs in the conversation about who pays, why they pay, and how the company captures that value. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
You know Cost-plus pricing is doing work when it changes a weekly choice — price, hire, channel, or kill. The working definition: Pricing strategy that adds a markup to the cost of producing a product.
Common mistake
Using Cost-plus pricing as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Cost of goods sold (COGS)
Direct costs associated with producing goods sold by a company.
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Cost-benefit analysis
Systematic approach to evaluating the costs and benefits of a decision.
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Cost-volume-profit (CVP) analysis
Financial analysis examining how costs, volume, and profits are related.
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Business model
Framework describing how a company creates, delivers, and captures value.
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