The effect on profit of price changes

Increasing Prices

Price increases can have a significant positive effect on business profit.
Use the table below to see how many sales you can afford to loose as a result of a price increase before you become worse off.
For example, if you are earning 30% gross profit and you increase your prices by 5% you can afford to loose 14% of your sales volume before your total gross profit reduces.

The amount that sales can fall (%) before total gross profit reduces

Current Gross Profit %
1015202530354050
Price Increase %21712976554
3231713119876
429211714121097
5332520171412119
105040332925222017
156050433733302723

Reducing Prices

However price reductions have a surprisingly large negative effect on profit.
Use the  table below to see how many more you need to sell to be better off when you reduce your prices.
If you are earning 20% gross profit and you reduce your prices by 5% you will have to double the number you sell to be earning more profit.

The amount that sales must rise (%) before total gross profit increases

Current Gross Profit %
1015202530354050
Price Reduction %225151197654
34325181411986
4673625191513119
510050332520171411
10
2001006750403325
15

300150100756043

Try out our online price change calculator or read more about pricing