What happens to your profit when you change your sales price?
Find out how a small change in your selling price can have a dramatic impact on your gross profit and sales.
Our online decision making tool is easy to use:-
- Enter 3 figures -number of sales, unit sale and cost prices
- Use the sliders to reduce or increase your selling price
- Look at the graph to view the adjusted sales transactions
The online software may not appear or work on tablets or smartphones. It requires adobe flash player to run,we are working on alternative options.
NB All financial data entered into the software is anonymous the only tracking is via google analytics.
Work out your price change on profit below (requires adobe flash player)
Quick review of our Impact on Price Change on Profit example above
(if you have entered your own figures press reset)
If you want to reduce your price by 10% and are concerned about the effect on your profit.
How many additional sales transactions are required to maintain the original gross profit?
- Requires an additional 50 sales transactions to maintain the original gross profit of £300
- Reduces sales price from £10 to £9
- Gross margin reduced to 22.2%
If you want to increase your price by 10% but are concerned that some customers will be resistant to the price rise.
How many sales transactions you can deduct to maintain the original gross profit?
- You can reduce sales by 25 transactions to maintain the original gross profit of £300
- Increases sales price from £10 to £11
- Gross margin increased to 36.4%
John Ruskin once said
"It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money - that's all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot - it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better."
Having worked in accountancy practices for a number of years we know it's what happens today and in the future that's important (not just the historical annual financial accounts). Find out how. we can help your business.
View our blog post - How Do I Calculate My Gross Profit for more detail regarding profit and loss statements.
The content of this article and software tool is provided for information only. While all reasonable care has been taken to ensure that the information in this article is accurate, no liability is accepted by Bright Chilli Limited for any loss or damage caused to any person or business relying on any statement or omission in the content of this software application.