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Business

Power to Set Price

See how price increase go change profit if sales volume drop.

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Your numbers

Result dey update as you type; no Calculate button dey. All calculation dey run inside your browser.

How profit change

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New price: —New profit: —

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How the result break down

Amount

Volume decline na di reduction wey you expect and enter directly; di calculator no predict am from elasticity coefficient. See di FAQ for how di source scenario label dis input.

Quick look at the result

We scale bars to the bigger profit. If the new-profit bar shorter, the price increase dey lose money even though price don rise.

How profit go change for different sales volume drops

Sales volume dropHow profit change

Price, cost, sales and price increase stay at the values above; na only volume decline dey change from row to row.

Formula

New price = price × (1 + increase%). New volume = sales × (1 − volume decline%). New profit = (new price − cost) × new volume. Current profit = (price − cost) × sales. Profit change = new profit − current profit.

Example wey show the calculation

Price $199, cost $110, sales 1,000 units, increase 8%, volume decline 5%: new price = $199 × 1.08 = $214.92, new volume = 1,000 × 0.95 = 950 units, new profit = ($214.92 − $110) × 950 = $99,674, current profit = ($199 − $110) × 1,000 = $89,000, so profit dey rise by $10,674.

Where e fit work and limits

Unit cost stay constant and na you dey enter the volume decline; we no dey predict am. We no model fixed costs, competitors' response, customers wey fit switch with time or demand shifts — use the result to compare scenarios, no treat am as forecast.

Version of di formula: 2667b4c63a0c · Example don get check:

Questions wey people dey ask often

How una calculate am?

Profit change = (price × (1 + increase%) − cost) × sales × (1 − volume decline%) − (price − cost) × sales. Multiply new margin per unit by new volume, then subtract today's profit.

Wetin the sales volume drop input mean?

Enter the sales-volume percentage wey you expect to lose after price increase. The formula dey apply that percentage directly to current sales. E no estimate demand or multiply price-elasticity coefficient by price change.

Price increase fit make me lose money?

Yes. If sales volume wey you lose outweigh the extra margin per unit, new profit go fall below current profit. Na that trade-off this calculator dey show.

Why cost for each unit remain the same?

Volume changes fit change unit cost for real life, but this model dey separate the price-volume trade-off. If your unit cost dey change with volume, adjust the cost input and compare scenarios.

What about fixed costs?

Dem dey cancel for the change: both scenarios get the same fixed costs, so na unit margin and volume alone dey drive the profit difference.

I suppose use only this result decide my price?

No. Use customer research, competitors' prices and margin check together with am. The volume decline wey you enter na the input wey uncertainty pass for, so test several values.

Other tools wey relate to dis

Results na estimates; dem no replace advice from qualified professional.