Price Increase Calculator
A price increase adds straight to profit per unit, so you can afford to sell less. Sales you can lose = (1 − profit per unit now ÷ profit per unit after) × 100. Enter your numbers to find that threshold.
Lose fewer sales than that and the increase makes you more money.
Other increases
- 5% increase 11.1% of sales
- 15% increase 27.3% of sales
- 20% increase 33.3% of sales
What the increase means
- If 100 customers buy today, you'd make the same gross profit with just 80 at the new price.
- Profit per unit rises from $40.00 to $50.00 — every customer who stays is worth more.
- The question to ask isn't "will anyone leave?" but "will more than 20.0% leave?"
Price increase formula
Formula and worked example
new price = current price × (1 + increase ÷ 100) sales you can lose % = (1 − profit per unit now ÷ profit per unit after) × 100 Gross profit is units × profit per unit. When profit per unit rises, the same total can come from fewer units — exactly as many fewer as the ratio of old to new profit per unit.
Worked example
- Current price · cost
- $100 · $60
- Profit per unit now
- $40
- 10% increase → new price
- $110
- Profit per unit after
- $50
- Sales you can lose
- 1 − 40 ÷ 50 = 20%
Price increase FAQ
How many customers can I lose after a price increase?
Divide your current profit per unit by the profit per unit at the new price, and subtract that from 1. At $100 with a $60 cost, a 10% increase lifts profit per unit from $40 to $50, so you can sell 1 − 40 ÷ 50 = 20% fewer units and earn exactly the same gross profit.
Why can low-margin businesses lose so few customers?
When margin is thin, a price increase grows profit per unit by a large proportion. A $12 item that costs $10 earns $2; a 5% increase adds $0.60 — a 30% jump in profit per unit — so you could lose about 23% of volume. High-margin businesses gain proportionally less from the same increase.
Does this mean I should raise prices?
It tells you the break-even point, not what customers will actually do. If you expect to lose fewer sales than the figure shown, the increase is likely to raise profit. Price sensitivity depends on your market, competitors, and how the change is communicated.
What should I include in cost per unit?
Every cost that rises with each sale — materials, wholesale cost, packaging, shipping you pay, payment fees, commissions. Fixed costs like rent and salaries don't change the answer because they're the same at either price.
Is this the same as price elasticity?
Related but simpler. Elasticity measures how demand actually responds to price. This calculator finds the volume drop at which you'd be no better off — the threshold your real elasticity has to beat.
Related calculators
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Break-Even Calculator
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