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- The break-even loss is the share of customers you can lose after a price increase before you earn less profit than you do today.
- It depends on your margin, not your fixed costs. The lower your margin, the more customers you can afford to lose, because the extra price is a bigger part of the profit on each sale.
- Formula: price increase in dollars ÷ new margin per unit.
- Use it before you raise prices, then compare the result with the drop in sales you honestly expect.
How to use the price increase break-even calculator
Enter your price and cost
Type the current price per unit and the variable cost per unit. Variable cost is what each extra sale costs you, such as materials, labor, payment fees and shipping.
Add your sales volume
Enter how many units, orders or customers you have in one period. The results scale to this number.
Set the price increase
Enter the percentage you are thinking about. The list under the result shows other increases so you can compare.
Compare with your expected loss
Open the advanced option and enter the drop in sales you expect. The calculator shows your profit change and the increase you would need to stay even.
How the break-even loss is calculated
Raising your price makes every sale worth more, but if customers leave you make fewer sales. The break-even point is where those two effects cancel out and your profit before fixed costs is the same as it was. Fixed costs such as rent do not change with volume, so they do not affect the answer.
Break-even customer loss
Current margin per unit = price − variable cost
New price = price × (1 + increase %)
New margin per unit = new price − variable cost
Break-even loss % = (new price − price) ÷ new margin per unit
Break-even volume = current volume × current margin ÷ new margin
If you lose fewer customers than the break-even loss, profit goes up. If you lose more, it goes down.
Price increase break-even examples
Example 1: A product with a healthy margin
You sell 1,000 units a month at $50 and each costs $30 to deliver. You are thinking about a 10% increase.
- New price $55.00
- Margin per unit $20 → $25
- Break-even loss 20.0%
- Break-even volume 800 units
- Profit before fixed costs $20,000 at both prices
You can lose up to 200 units before profit falls below today. If you lose only 10%, profit rises to $22,500, which is $2,500 more.
Example 2: A thin-margin shop
A café sells a drink for $5.00 that costs $4.00 to make. A 10% increase takes the price to $5.50.
- Margin per unit $1.00 → $1.50
- Break-even loss 33.3%
Because the margin is thin, a small price rise adds a lot to each sale. The café could lose a third of its customers and still break even.
Example 3: A high-margin service
A service costs $20 to deliver and sells for $100. You raise the price 5% to $105.
- Margin per unit $80 → $85
- Break-even loss 5.9%
With a high margin, losing about one customer in seventeen wipes out the gain, so this kind of increase needs more care.
Break-even loss at different margins
These figures assume a $100 price. Each line shows the break-even loss for a 5%, 10%, 15% and 20% price increase.
- 20% gross margin: 20.0%, 33.3%, 42.9%, 50.0%
- 40% gross margin: 11.1%, 20.0%, 27.3%, 33.3%
- 60% gross margin: 7.7%, 14.3%, 20.0%, 25.0%
Where a price increase break-even calculator helps
Small businesses
Test a planned price rise before you announce it to customers.
Service providers
See how many clients you could lose when you raise your rate.
Subscriptions
Check how much churn you can absorb when a plan gets more expensive.
Sellers
Judge whether a cost or fee increase needs a price change to hold your profit.
It shows the break-even point, not how customers will really react. Look at your own sales history, competitor prices and how loyal your customers are. To check your pricing and costs further, try the markup calculator or the break-even calculator.
Price increase break-even calculator FAQ
How many customers can I lose after a price increase?
It depends on your margin. Divide the price increase in dollars by your new margin per unit. With a $50 price, a $30 cost and a 10% increase, you can lose up to 20% of your customers before profit falls below what it is today.
Do fixed costs change the break-even loss?
No. Fixed costs stay the same whether you sell more or less, so they cancel out when you compare profit before and after the increase. The variable cost per unit is what matters.
Why can low-margin businesses lose more customers?
When your margin is thin, the extra dollars from a price increase are a large share of the profit on each sale. That extra profit can make up for a bigger drop in volume.
What if my own costs are rising too?
Update the variable cost per unit to the new figure and enter the price you plan to charge. The calculator then shows the volume you can lose at that cost. The markup calculator helps you see the markup behind a price.
Is the break-even loss the same as expected churn?
No. It is the most you can lose without hurting profit. Your expected loss is your own estimate. If the expected loss is lower than the break-even loss, the increase should pay off.
Does this work for services and subscriptions?
Yes. Use the monthly price, the monthly cost to serve each customer and your customer count. For hourly work, see the freelancer hourly rate calculator.