Cost-plus pricing: Cost-plus pricing sets a price by calculating what a job costs to make, including a share of overhead, and then adding a fixed markup or target margin on top.
Cost-plus is the default pricing method in custom manufacturing, and for good reason. Every part is different, so there is no market price to look up. You work out the cost (machine time, material, labour, setup, a share of overhead) and add your profit.
Example: a CNC part needs 40 minutes at €65 an hour (€43.33), €9 of aluminium and €12 of finishing. The cost is €64.33. With a 30% markup, the price is about €83.63.
The strength of cost-plus is that every price is defensible and repeatable. You never sell below cost by accident, and two estimators get the same answer from the same inputs.
The weakness is that it ignores what the work is worth to the buyer. A rush prototype that saves a customer a week may be worth far more than its cost plus 30%, while a simple part in a busy market may not bear the full markup. That is where value-based pricing adjusts the result.
A common mistake is leaving overhead out of the cost and relying on the markup to cover it. Then the markup is not profit at all. Make sure you know whether your target is a markup on cost or a margin on price. Read how to quote manufacturing parts for the full build-up.
Go deeper: How to quote a manufactured part: the estimator's method