Price Increase Needed Calculator
Determine the exact price adjustment required to maintain your target gross profit margin when your supply costs rise. Avoid margin compression in inflationary environments.
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Result
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Formula
Calculates the necessary selling price by dividing the new higher cost by your desired profit retention ratio.
Worked Example
Stopping Margin Compression
- Psychological price points (like $9.99) often need to be broken when costs spike.
- Communicate the value you provide to justify the hike to your customers.
- Review your pricing quarterly to stay ahead of supplier increases.
Don't guess your new prices, use data to protect your bottom line.
You can also calculate changes using our Cost Pass-Through Calculator or Break-Even After Cost Increase Calculator.
Frequently Asked Questions
Why is my target margin so important?
Gross margin pays for your fixed costs (rent, salaries) and provides your net profit. If costs rise and prices stay flat, your business can become unsustainable.
Should I pass 100% of cost increases to customers?
In many cases, yes. If you absorb the cost, you effectively cut your take-home pay or business investment budget.
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