Price Change Impact Calculator
A price change impact calculator shows what a price increase or discount does to gross profit, and how much sales volume you could lose, or would need to win, to end up with the same gross profit. Enter annual revenue, gross margin and a price move. It is built for owners and leaders of Australian businesses between $3M and $30M deciding whether to lift prices, hold them or discount.
Your numbers
Your own assumption. Negative if you expect to lose some volume.
+$180,000 gross profit a year at the same volume+9.1% of today's gross profit
Volume you could lose and still break even
8.3%
Gross margin after the change
35%
Gross profit change with your volume assumption
+$180,000
On trackAt 33% gross margin you could lose 8.3% of your volume after a 3% price move and still make the same gross profit. Most owners fear a far bigger loss than they ever see.
Who this is for
Owners and leaders of Australian businesses between $3M and $30M in revenue who want a straight answer from their own numbers, without a spreadsheet or a sales call. It takes about 2 minutes.
How the calculation works
At the same volume, every dollar of a price increase is extra gross profit, so the gain is revenue multiplied by the price change.
The break even volume change is the price change divided by the gross margin plus the price change. It shows how much volume you could lose after an increase, or must win after a discount, to keep gross profit level.
Your own volume assumption is then applied to the new revenue at the new margin and compared with today's gross profit.
Built from work carried out earlier in Adam's career.
Common questions
How much volume can I lose after a price increase and still make the same gross profit?
- The break even volume loss is the price increase divided by the gross margin plus the price increase, so at a 33% gross margin a 3% increase can lose about 8.3% of volume and still make the same gross profit.
Why is discounting so expensive?
- A discount comes straight out of gross profit, so at a 33% gross margin a 3% discount needs about 10% more volume just to make the same gross profit as before.
Does this calculator account for customers leaving?
- Yes, the expected volume change field lets you enter your own assumption about lost or won volume, and the calculator shows the gross profit result with that assumption applied.
See the whole business, not one number
The free Operating Scan is 21 plain statements about how the business actually runs, answered Not us to Always, in about six minutes.