A price floor and price ceiling are boundaries that define the lowest and highest price a product or service should be sold for.

A price floor is the minimum acceptable price. It is usually based on cost, required margin, or internal pricing rules. Selling below this level risks losing money or damaging pricing discipline.

A price ceiling is the maximum price a company can realistically charge. It is shaped by customer willingness to pay, competitive alternatives, perceived value, and market conditions. Pricing above this level can reduce demand or push customers to competitors.

In B2B, price floors are often used to control discounting and protect margin, while price ceilings help guide positioning and ensure pricing stays aligned with what the market will accept. Together, they create a pricing range within which deals should be structured.

These boundaries are not fixed. They can vary by segment, deal size, product, or customer type. For example, a high-value customer with strong ROI may justify a higher ceiling, while a price-sensitive segment may have a lower one.

Using price floors and ceilings helps companies avoid inconsistent pricing, reduce margin leakage, and make more structured pricing decisions, especially in sales-led environments.