Cost+20% Model

Transparent, Fair Pricing for All Members

Overview

Cost+20% is a foundational economic principle of Liana Banyan. All products and services on the platform are priced at their actual cost plus a fixed 20% margin. This ensures fair compensation for creators while keeping prices accessible.

The Formula

Final Price = Actual Cost × 1.20

Where Actual Cost includes:
- Materials
- Labor (at fair wage)
- Equipment depreciation
- Platform fees

Examples

Product Sale

Materials:        $50.00
Labor (2 hours):  $30.00
Equipment:        $5.00
Platform fee:     $2.00
─────────────────────────
Actual Cost:      $87.00
× 1.20
─────────────────────────
Final Price:      $104.40
Creator margin:   $17.40

Service

Labor (3 hours @ $25): $75.00
Materials:             $10.00
Travel:                $5.00
─────────────────────────────
Actual Cost:           $90.00
× 1.20
─────────────────────────────
Final Price:           $108.00
Provider margin:       $18.00

Why 20%?

Structural Bylaw Status

Cost+20% is enshrined as a Structural Bylaw, meaning:

• It cannot be changed by normal vote
• Requires Founder approval to modify
• Applies platform-wide, no exceptions

Home Business Extension

Members running home businesses through Liana Banyan can use the Cost+20% model with additional provisions:

Equipment Depreciation

Initial cost recovery: 50% in Year 1
Depreciation:          25% Years 2-3
                       10% Years 4+
Upgrade pathway:       Trade-in + depreciation

Utilities Allocation

If business use > 10% of space:
- Pro-rata utility allocation
- Documented usage required

Calculator Function

function calculateCostPlusTwenty(costs: {
  materials: number;
  labor: number;
  equipment: number;
  platformFee: number;
}): {
  actualCost: number;
  finalPrice: number;
  creatorMargin: number;
} {
  const actualCost = 
    costs.materials + 
    costs.labor + 
    costs.equipment + 
    costs.platformFee;
  
  const finalPrice = actualCost * 1.20;
  const creatorMargin = finalPrice - actualCost;
  
  return { actualCost, finalPrice, creatorMargin };
}

Enforcement

• All marketplace listings must show cost breakdown
• Harper Auditors can verify costs
• Violations impact Trust Ladder score

Related Systems

• HIVI (Deterministic Economics)
• Marketplace
• MimicTrunk (Trust)