Cost-plus pricing is a method that sets a product’s selling price by adding a fixed markup or margin on top of what the product costs you. The markup is a percentage of cost, so the price moves with cost and delivers a target profit on every unit. It is one of the simplest pricing approaches because it works from numbers you already track rather than from what buyers are willing to pay.
How it works
Start with the unit cost, which usually means the landed cost of goods plus any per-unit expenses you want to recover. Then apply a markup percentage. The formula is: price = unit cost x (1 + markup). A 40 percent markup on a product that costs 100 gives a price of 140. Note that markup and margin are not the same. A 40 percent markup produces roughly a 28.6 percent margin, so decide which you are targeting before you set the number.
Why it matters
Cost-plus pricing guarantees you clear your costs and hit a set profit per unit, which makes it predictable and easy to defend in a negotiation. The tradeoff is that it ignores demand, competitor prices, and what a buyer perceives the product is worth, so it can leave money on the table or price you out of a deal.
In B2B quoting on Shopify
Quotes are where cost-plus shows up most, because B2B buyers expect prices tailored to volume rather than the fixed storefront price. Many merchants keep a base cost per SKU and apply tiered markups by order size or customer segment when they build a quote. If you turn quote requests into Shopify draft orders, you can set line-item prices from your cost-plus rule and still let the buyer pay through normal checkout. See the B2B quoting glossary for related terms like margin and tiered pricing.