Should I raise my prices? Most owners wait too long.
See how much sales volume you could lose after a price increase and still come out ahead, or how much more you would need to sell to make a discount pay off.
How this estimate works
Gross margin is the share of each sales dollar left after direct costs like materials, product cost, and direct labor. The higher your price, the more of each sale is margin, because your direct cost per unit does not change.
A price increase can lose some customers and still leave you better off. The break-even point is the price change divided by your margin plus the price change. At a 40% margin, an 8% increase breaks even if you sell 16.7% fewer units.
Discounts work the other way and are harder to win back. At a 40% margin, a 10% discount needs 33% more units just to earn the same gross profit.
Enter the change in units you actually expect, and the calculator shows the gross profit you would earn each month compared with today.
Assumptions and limits
- Direct cost per unit stays the same, and fixed costs do not change with the price.
- Applies one price change across all sales. If you are changing some prices and not others, run each product line or service separately.
- Figures are monthly gross profit, before overhead, income tax, and owner draws.
An estimate is a starting point
Thinking about a price change? We look at your margins by product, job, or customer first, so you change the right prices. This calculator is educational and is not tax advice.
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