Price-Increase Break-even Tool

When to use this tool

Use it before you put a price up. A price rise adds straight onto the contribution you keep on every sale, so you can afford to lose some customers and still come out ahead — and because you now earn more per unit, the volume you can lose is usually far bigger than people fear. This tool turns “10% on” into the real number of sales you could lose before the rise starts costing you money.

How to use it

1. The item. Enter the current sale price inc VAT and the item cost ex VAT. The cost is everything it takes to make or buy one — ingredients, packaging and an allowance for waste — rolled into a single figure.
2. The price rise. Enter the increase as a percentage on the current price, or type the new price and let the tool work out the percentage. It re‑runs the contribution maths at the higher price and shows it beside the current price in the per‑item table.
3. Your volumes. Enter the units you currently sell as your baseline, and a min units figure — a realistic floor you wouldn’t expect to fall below. The answer then reads as real numbers — “you could drop to 866, not 1,000” — not just a percentage.
4. Royalty or commission (optional). If you pay a royalty or commission on sales, switch it on, set the rate, and choose whether it’s charged on net or gross sales. A higher price means a slightly bigger fee, which the tool nets off the gain.
5. Forecast the drop. In Volume forecast, set the sales drop you expect. It starts at a typical food & drink figure; the further your figure runs below it, the read escalates from optimistic to unlikely. The verdict then tells you whether that volume would leave you better off (green tick) or worse off (red cross) than leaving the price alone.
6. Read the result and save. The drop scale lines up the typical drop, your forecast and the break‑even point on one bar — green while you’re still ahead, red once you’ve lost too much. The break‑even chart shows the same in pounds and units; drag the slider to test forecasts live, then export a PDF report to keep or share.

How the volume forecast works

A price rise pays off unless you lose so many sales that the extra margin per unit can’t make up for the missing volume. Your expected drop starts at a typical food & drink figure — demand research suggests a price rise tends to cost roughly half its size in volume, so 10% on loses around 5% of sales, though sensitive or commodity items can lose more. The forecast note compares your figure with that typical: in line earns a green tick, while assuming a smaller drop reads as optimistic, then unlikely. The drop scale then plots the typical drop, your forecast and the break‑even point on a single bar, so you can see whether your expected loss stays safely inside the headroom. As long as the item makes money now, a rise always improves contribution per unit — the only question is how much volume goes with it.

Jargon buster

Contribution per unit

Net price less item cost and any royalty — what each sale adds before fixed overheads. A price rise adds straight onto it.

Net price

The sale price with VAT removed — all the margin maths is worked out on this figure.

Break-even units

The fewest units you could sell at the new, higher price and still make the same total contribution you make today.

Volume you can lose

Current units minus break‑even units — the sales you could lose to the price rise and still stand still.

Expected drop

The fall in sales you think the rise will cause, as a % below your current volume. It starts at the typical food & drink drop — adjust it to match your item.

Typical drop

The sales fall a price rise usually brings in food & drink — about half the rise, so 10% on ≈ 5% fewer sales. The yardstick your forecast is measured against.

Royalty / commission

A fee paid as a % of each sale, on net or gross. Optional — switch it on only if your business pays one.

Good to know

• The thinner an item’s margin, the more volume a rise can afford to lose — the rise is a bigger proportional boost to a slim contribution, so it buys the most headroom exactly where margins are tightest.
• Pick your country from the currency selector to set the symbol and tax treatment; US prices are treated as pre‑tax, so tax defaults to 0%.
• Nothing you type leaves your browser — your figures stay on this device.