As the title says – I'm struggling to find a word to describe the value that is added to the price charged for something to avoid passing on manufacturing savings to the customer.
For example if building a ship costs my company $1000 and we charge $2000 to the customer.
We then change suppliers and the ship now costs $800 to build.
However we want to still charge $2000 for the ship, so is there a name for that $200 we add to into the price to keep it the same?
Note that it doesn't have to be an actual technical financial term – just an English word that has this kind of inflation meaning
Best Answer
The word "markup" has been suggested in comments, with the response that "markup does work but in this case the price already has a markup which is distinct from this extra value".
This site about accounting suggests that while markup can simply mean "the difference between cost and the selling price" (ie. the difference between $1000 and $2000 in your example), there is a further meaning in retail of "the 'additional' markup from the original selling price [because of things like stock shortages and high demand]" (ie. the $200 you add to the price because of your supplier change).
So I'd suggested using the phrase "additional markup".