Price Increase Calculator
Work out a new price from a percentage increase, its effect on margin, and how much sales volume you can lose before profit falls. Raise one price or a whole price list, round to .99, or check the increase between two prices.
Your numbers
Up to 20 prices. Each one gets the same increase and rounding.
New price
- Increase per unit
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- Effective increase
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The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.
How to calculate a price increase
New price = current price × (1 + increase ÷ 100). A $49 item with a 4% increase is $49 × 1.04 = $50.96. A fixed increase is simpler: $120 plus $7.50 is $127.50, which is 6.25% on that item and a different percent on every other item in the list.
That is the choice behind most price letters. A percent keeps the relationship between items; a fixed amount hits cheap items hardest. Paste the whole list into the New price mode to see both before you decide.
How much volume can you lose?
A price increase pays as long as you do not lose too many sales. The break-even point is the increase divided by the gross margin plus the increase: −i ÷ (m + i). At a 40% margin, a 10% increase breaks even at a 20% drop in units. At a 25% margin, a 5% increase breaks even at 16.67%.
Worked through: 1,000 units at $100 with a $60 cost earn $40,000 gross profit. At $110, each unit earns $50, so 800 units earn the same $40,000. Lose fewer than 200 units and you are ahead; lose more and the increase cost you money. Thin margins leave less room, which is why low-margin distributors feel cost increases first.
Rounding to price points
If your prices end in .99 or .95, the calculator rounds each new price up to the next one, never down, so an increase never ends up smaller than you planned. $50.96 becomes $50.99, and $50.99 becomes $50.99. The effective increase shows what the customer will actually see.
How to announce a price increase to customers
The calculation is the easy half. How you tell customers decides how many of them you keep.
1.Give notice
Tell customers before the new price takes effect, with the date it starts. A surprise on an invoice costs more trust than the increase itself.
2.Say what and why, briefly
Which items, by how much, from when, and the real reason: your costs, a supplier's increase, more service. One paragraph, no apology tour.
3.Call your best accounts first
The customers who matter most should hear it from you on a call, not from a letter. Ask what it does to their budget and listen.
4.Offer a choice where you can
An order at today's price before the date, a longer contract at a locked price, or a phase-in. A choice turns a yes-or-no into a conversation.
5.Prepare for the objections
Expect "your competitor is cheaper" and "we have no budget". Know your answer and your walk-away point before the call.
6.Write down every reaction
Who accepted, who pushed back and on what, who asked for time. That record tells you where the next increase will land.
Three mistakes to avoid
Dividing by the new price to get the percent (it understates the increase). Reading the margin gain as the increase: a 10% increase on a 40% margin adds 5.45 points, not 10. Undoing an increase with a discount of the same percent: +10% then −10% leaves $100 at $99.
For one price and cost, the margin calculator gives margin and markup. For the percent change between any two numbers, use the percentage increase calculator.
Before the price conversation: handling price objections, value-based selling, selling through distributors.
The maths takes a minute. The call where you announce it decides the rest.
How each customer reacts to the new price (who pushes back, who asks for a phase-in, who goes quiet) is what you need to remember next quarter. ParrotNotes records the conversation, writes the summary and pulls out the key points and action items, so every reaction is on paper. Free for 100 minutes of recording a month.
Get ParrotNotes freeRelated tools
- Margin and Markup CalculatorWork out margin, markup and selling price from cost, convert markup to margin, and see what a discount does to your margin before you quote.Open the tool
- Percentage Increase CalculatorWork out the percentage increase or decrease between two numbers, add a percent to a number, or find the original value before a change.Open the tool
- Discount CalculatorGet the sale price and the savings from a percent off, find the percent from two prices, and stack two discounts to see the real total.Open the tool
- Break-Even CalculatorFind the break-even point in units and revenue from fixed costs, price and variable cost, plus the sales needed for a target profit.Open the tool