How to compare a product price increase or reduction
A higher price can improve each order while reducing the number sold. Keep those effects separate when you plan a change.
Open the Target Profit Sales Calculator →Keep everything except the intended change consistent
Start with a saved cost and fee assumption, then change the selling price. That makes the effect of the price itself visible. If postage, materials or advertising are also changing, create a separately labelled scenario so you can see what each change contributes.
Check percentage fees at the new price and update any exact manual fee that depends on price. An invoice-specific fee entered as a fixed amount will not automatically follow a new threshold or tier. Keep the comparison date and source with the result.
Compare pounds per order alongside the margin
With £12 included costs and no changing fees, £20 revenue leaves £8 per order. £22 leaves £10. The price rises by 10%, but the contribution rises by 25%. Small price changes can have a larger effect on what remains because many costs do not fall or rise with the listed price.
To replace £800 contribution from 100 orders at £8 each, the £10 scenario needs 80 orders. That describes the volume relationship. It does not predict how customers will respond to the new price or establish an acceptable demand reduction.
| Price | Included cost | Contribution | Orders for £800 |
|---|---|---|---|
| £20 | £12 | £8 | 100 |
| £22 | £12 | £10 | 80 |
Check the offer as customers will see it
Review the complete buyer price, including delivery and entered tax treatment. If a price change coincides with free shipping, a bundle or a discount, calculate the complete offer. Comparing an old item-only price with a new all-in price mixes two different scenarios.
After a change, review conversion, order mix and total contribution over a suitable period. Stock availability, season and advertising can also affect sales, so avoid attributing every change in volume to the new price. Keep the evidence alongside the original estimate.
A worked example
If contribution rises from £5 to £6, 100 orders at the old price produce £500. About 84 orders at the new contribution exceed that amount.
Before you use the result
- Save a consistent original cost basis.
- Recalculate percentage and tiered charges.
- Compare contribution in money as well as percentage.
- Calculate the volume needed to retain a chosen total.
- Review the actual complete customer offer.
Common questions
Does the highest margin always give the best outcome?
The total also depends on order volume and the costs of serving those orders. Compare total contribution under realistic scenarios, then test demand rather than assuming the calculator predicts it.
Can I compare a change in several costs at once?
Yes, but label it clearly and keep a version that changes only the price. That helps explain whether a result came from pricing, costs, fees or a mixture.
Put the numbers into practice
Target Profit Sales Calculator →How many extra sales does a discount need? →How discounts affect percentage fees and product profit →How to review small-business costs each month →A practical calculation guide, not professional accounting, legal or tax advice. Examples are illustrative unless identified as official. Calculation methodology and limitations.