Price Increase Calculator — How Many Sales Can You Lose?
See how much sales volume you can lose after a price increase and still earn the same profit, plus the new price, profit at your expected volume loss and a table of outcomes.
How it works
New price = price × (1 + increase %) · Break-even volume loss = 1 − (price − cost) ÷ (new price − cost) · Profit = (new price − variable cost) × units sold
A price rise lets every remaining sale earn more, so you can afford to lose some customers before total profit falls. The break-even volume loss compares the old and new profit per unit: when margins are thin, a small price increase allows a large drop in sales. This is why pricing is one of the strongest profit levers — McKinsey’s classic analysis found a 1% price rise lifted operating profit by about 11% for a typical company when volume held steady.
Worked example
A product sells for $50 with $30 of variable cost and 1,000 units a period, earning $20,000. After a 10% increase to $55, each unit earns $25 instead of $20, so 800 units still earn $20,000 — you can lose 20.00% of sales and keep the same profit. If sales drop only 5% to 950 units, profit rises to $23,750 (+$3,750).
Sources: Harvard Business Review — Managing Price, Gaining Profit (Marn & Rosiello)
Frequently asked questions
How much volume can I lose after raising prices?
Divide the old profit per unit by the new profit per unit and subtract from 1. With a $20 margin rising to $25, you can lose 1 − 20 ÷ 25 = 20% of units before profit falls below where it was.
Why use variable cost and not total cost?
Fixed costs such as rent do not change when you sell a few more or fewer units, so they cancel out when you compare before and after. Only the costs that change with each unit affect the trade-off.
How do I estimate how many customers I will lose?
Look at past price changes, competitor prices and how essential your product is to buyers. The price elasticity of demand summarises this: an elasticity of −1.5 means a 10% price rise cuts volume by about 15%.
How should I announce a price increase?
Give existing customers notice, explain what has changed (costs, improvements), consider keeping loyal customers at the old price for a while, and pair the increase with added value where possible.
Related calculators
Planning estimate only — real prices, fees and results depend on your own costs, platform terms, local taxes and what your market will pay. Check the numbers against your books before you commit to a price or budget.