Cost plus pricing may seem like a simple solution, just add a markup to your costs and you’re done. However, as we discussed in our previous post, the simplicity of this method often leads to significant operational headaches. Expenses fluctuate. Margins erode. Manual updates become time-consuming and error-prone. What starts as a straightforward pricing model can quickly turn into a drain on profitability.
That’s where Rockton Pricing Management (RPM) steps in. Designed to bring automation, intelligence, and flexibility to pricing, RPM turns cost plus pricing into a dynamic, margin-protecting tool instead of a static formula.
Let’s look at the most common cost plus pricing challenges, and how RPM solves them.
Common Challenges When Implementing a Cost Plus Pricing Strategy
Challenge 1: Cost Changes Lead to Inaccurate Prices
In the real world, costs don’t stay still. Fuel surcharges increase. Supplier prices shift. Labor rates climb. Yet many businesses still rely on static spreadsheets or manual processes to update prices, leading to outdated pricing that quietly eats into margins.
How RPM Helps:
With Rockton Pricing Management, price updates happen automatically. RPM uses percentage-based cost-plus pricing that recalculates prices in real-time as costs change. Instead of manually updating every product or contract, businesses can apply a single rule that adjusts prices automatically whenever the underlying cost data is updated in the ERP system.
Automating this process with pricing management software ensures that every price you quote reflects the true cost, and the margin you want to keep.
Challenge 2: Manual Pricing Processes Are Time-Consuming and Risky
Traditional cost plus pricing is often spreadsheet heavy. That means pricing updates get delayed, mistakes slip through the cracks, and teams waste time doing repetitive calculations.
How RPM Helps:
RPM eliminates the need for manual price sheets entirely. Once your pricing rules are configured, whether by item class, customer class, cost tier, or any combination, RPM applies them consistently across your entire product catalog. The result? Less human error, faster updates, and more time for your team to focus on strategy rather than spreadsheets.
Challenge 3: Missing Costs Erode Margins
Many companies overlook the costs that impact their profitability. Delivery fees, restocking charges, commissions, and promotions are often excluded from pricing calculations, resulting in underpriced products and razor-thin margins.
How RPM Helps:
Rockton Pricing Management enables layered pricing calculations, allowing you to include additional cost elements like landed cost, loaded cost, or even customer-specific tiers. These “plateaus” can be configured and reused across scenarios, ensuring your pricing always reflects the full cost picture, not just the base production cost.
This means you’re not only covering your core costs but also protecting your margins from hidden or fluctuating expenses.
Challenge 4: One-Size-Fits-All Pricing Doesn’t Work Anymore
Customers, products, and contracts vary widely, yet many businesses apply the same pricing logic across the board. This can lead to over-discounting or underpricing in the wrong places.
How RPM Helps:
With RPM, pricing logic can be tailored to specific business conditions. Want to apply different markups for different customer tiers? Need separate rules for high-margin products versus commodity items? RPM handles it all. The software supports multi-dimensional pricing structures that are flexible enough to accommodate complex business models while staying easy to manage.
Challenge 5: ERP Limitations Hold You Back
Many companies struggle to enforce advanced pricing strategies inside their existing ERP or accounting systems. They may have the data, but not the flexibility to act on it.
How RPM Helps:
Rockton Pricing Management is designed to work alongside most ERP systems, integrating seamlessly to extend pricing capabilities. This means businesses can adopt cost-plus pricing without needing to overhaul their existing tech stack.
Whether you’re using Microsoft Dynamics GP, Acumatica, or another ERP, RPM gives you the pricing power your system may lack.
A Modern Solution for a Classic Strategy
A cost plus pricing strategy is valuable when done right. The problem isn’t the method, it’s the lack of tools to manage it effectively. That’s where Rockton Pricing Management stands out. By automating pricing updates, accounting for all relevant costs, and giving you flexible control over pricing logic, RPM helps businesses transform a static formula into a strategic asset.
Instead of guessing whether your margins are protected, you can be confident they are, no matter how often your costs change.
If your team is struggling with outdated pricing tools, frequent cost changes, or margin erosion, it’s time to rethink how you manage cost plus pricing. Rockton Pricing Management Software helps you automate the complexity, protect your profits, and scale your pricing strategy with ease.
