Pricing Strategies for Small Businesses – Cost plus Pricing

Cost plus Pricing (CPP) is probably the most suited pricing strategy for most small business startups. It’s also the most widely strategy used by businesses all around. This is so, because CPP is the simplest method of determining price, and it embodies the basic idea behind doing business.

That is, “you make something, sell it for more than you spent making it (because you’ve added value by providing the product)”, according to Vivian Guo, of Price Intelligently.

The Balance Small Business defines Cost plus Pricing as follows: “Cost-plus pricing, also called markup pricing, is the practice by a company of determining the cost of the product to the company and then adding a percentage on top of that price to determine the selling price to the customer.”

How do you calculate Cost plus Pricing?

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