HUV DESIGN OFFICE
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JOURNALOctober 3, 2026

How B2B Companies Can Negotiate Price Increases—Communicating Cost Justifications and Customer Value Separately

Conclusion: Do Not Confuse the Reason for a Price Increase with the Reason to Continue Doing Business

When negotiating a price increase, first identify the products or services involved, the current terms, the costs that require an adjustment, and your proposed price. Then confirm the quality, delivery schedules, and scope of support the customer expects from doing business with your company, and consider pricing and delivery terms together. Rising costs provide grounds for requesting a price adjustment, but they do not automatically demonstrate value to the customer.

The Small and Medium Enterprise Agency’s “Price Negotiation Handbook” (last revised in January 2026) lists the following steps: reviewing the scope of work and transaction terms, collecting cost data, determining costs by product or service, preparing unit price lists and quotations, and reassessing the added value your company provides. This article offers a practical framework based on that resource. It is not a method that guarantees negotiation outcomes.

Five Items to Summarize on One Page Before Negotiations

1. Which Prices Will Change

Record not only product names and the scope of work, but also quantities, specifications, delivery schedules, maintenance, and payment terms. Comparing old and new prices while the scope remains unclear makes it harder to explain the impact of the change. Also distinguish between the effective dates for ongoing business and new quotations.

2. Which Costs Changed, When, and by How Much

Identify the cost categories that actually affect your costs, such as raw materials, energy, labor, and outsourcing. Gather verifiable documentation, including purchase invoices, payroll and outsourcing records, labor hours, and the assumptions used when preparing quotations. Rather than simply using a public index as your own rate of price increase, relate it to your actual cost figures.

3. Your Proposed Price and Minimum Viable Terms

Clearly state the current price, the requested adjustment, and the effective date. Identify the terms under which profitability would deteriorate even if orders continued, and consider alternatives involving changes to quantities or specifications. Decide how far you can compromise based on the costs of each project, available capacity, and the impact on the overall business relationship.

4. The Value You Provide That Customers Recognize

Rather than using abstract phrases such as “high quality,” list what you actually provide: inspections, responses to changes, delivery schedule management, and communication when problems occur. Do not unilaterally emphasize aspects the customer does not prioritize; confirm what needs to be maintained. It is also important not to promise quantified cost savings that have not been measured.

5. Whom to Approach, When, and How

Confirm when the customer makes decisions, such as contract renewals, budget planning, or the next order. The Small and Medium Enterprise Agency’s handbook recommends proactively presenting your proposed price with supporting evidence rather than simply waiting for the other party to suggest a price, and submitting a written request when necessary. Prepare quotation terms and explanatory materials that your contact can take back for internal review.

Keep Two Conversations Separate During Negotiations

First, explain your rationale and proposed terms: “To continue providing this under these conditions, we would like to adjust this portion of the costs.” Next, ask, “Which functions and quality standards does the customer need to maintain?” The first concerns your profitability; the second concerns the customer’s reasons for choosing you. Addressing both allows you to choose between a straightforward price increase and a proposal that reconfigures specifications, quantities, or delivery schedules.

If you cannot reach agreement, record the reasons under separate categories: price, budget timing, specifications, and internal approval. Even if you choose to reduce or maintain the price, limit the duration and scope, and reassess profitability. The analysis to undertake before concluding that you “lost on price” is covered in detail in What to Check Before Lowering Your Prices.

When Terms Change After an Order Is Placed

If additional work or specification changes arise, communicate the changes and their impact on delivery schedules and costs early, rather than presenting an unexpected bill once the costs have been finalized. The Small and Medium Enterprise Agency’s handbook also recommends noting potential price adjustments in quotations and promptly discussing problems that arise after an order is received. If your contract specifies procedures, follow them.

The Limitations of This Approach

Even when cost increases can be verified, your proposed price will not be accepted in every transaction. Decisions will vary depending on competitive conditions, the availability of alternatives, contracts, and procurement policies. If you suspect a legal issue in a business transaction, do not draw conclusions from this article alone. Review the contract and consult an appropriate specialist advisory service or professional.

For support in clarifying why customers choose you beyond price, and aligning your sales materials and delivery capabilities, see HUV DESIGN OFFICE’s Services.

References

Author: Daisuke Irikura (Representative Director, HUV DESIGN OFFICE Co., Ltd.)

Translated from the original Japanese article. Read in Japanese

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