Cost-Plus Pricing is a straightforward pricing strategy where you calculate the total cost of producing your product or service, then add a fixed markup (usually a percentage) to determine the selling price.
Price = Cost + Markup
Why it matters for startups
Cost-plus is simple, low-risk, and helps ensure you're not selling at a loss. But it ignores market trends, customer value perception, and competitor pricing. It’s a decent starting point, but usually not scalable for fast-growing or value-driven startups.
When should a startup use cost-plus pricing?
It’s useful when your costs are predictable and you're in a market with stable pricing. But it’s often best for early-stage testing, not long-term growth.
What’s the biggest risk of using cost-plus pricing?
You might price yourself out of the market—or leave money on the table if customers are willing to pay more.
How do I calculate a healthy markup?
Typical markups range from 10–50%, depending on your costs, industry, and target margins. Always factor in overhead and desired profit.
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