Price Floor

Price Floor is a key term in foreign trade negotiations, referring to the minimum selling price acceptable to the seller; below this price, the seller refuses the deal. It is usually calculated based on costs (production costs, transportation, tariffs, exchange rate fluctuations, etc.) plus minimum profit, and serves as the defensive boundary in negotiations. Usage scenarios include: bargaining with buyers, bidding quotations, long-term contract pricing, etc. Notes: The price floor should be kept confidential to avoid being discovered by the other party; market fluctuations and exchange rate risks should be considered, and it should be adjusted regularly; it should not be confused with the 'Target Price,' which is the desired transaction price and is usually higher than the floor. Difference from 'Cost Price': Cost price only covers costs, while the price floor includes minimum profit. Similar to 'Reserve Price,' but reserve price is often used in auctions. Foreign trade practitioners should clearly define the floor, but in negotiations they can flexibly use other terms (such as payment method, delivery time) to exchange for price space.