Glossary · Business & Sourcing
What Is Open-Book Costing?
Open-book costing is an arrangement in which the manufacturer discloses the cost structure behind a price — material, packaging, labour, overhead and margin — rather than quoting a single figure. It is used in closer partnerships and on higher-volume programmes to make cost changes discussable.
Why it matters when you source
Open-book costing is worth asking for once your volumes make you a significant buyer, because it makes future negotiations about specific line items instead of about the total. Many factories will share a breakdown even if they will not open the full book, and a breakdown resolves most pricing arguments.
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