Finance Tools
Price Increase Needed to Maintain Margin Calculator
Calculate the price increase required to maintain a target gross margin after unit costs increase.
Find the required price increase to maintain a target gross margin after unit costs increase.
Your current selling price per unit.
Your current unit cost before the increase.
Current gross margin: 35.00%
Example: 8 means +8%.
Calculated after the increase.
If disabled, this defaults to your current margin (35.00%).
Required pricing
Required new price: $108.00
Price change: +$8.00
Price change (%): 8.00%
Profit per unit
Before: $35.00
After (no price change): $29.80
At required price: $37.80
This assumes: required price is calculated to hit the target gross margin on the new cost.
How it works
- Target gross margin% = (price − cost) / price.
- Rearrange to solve for price: price = cost / (1 − margin%).
- Required increase = required price − current price.
FAQ
Why can the required price jump a lot?
Because margin% is defined over price. Maintaining high margins under rising costs can require outsized price moves.
Does this include demand drop from higher prices?
No. It’s a unit-economics requirement. Combine with elasticity tools to model volume changes.
How to use this price increase needed to maintain margin calculator
- Enter your current selling price and unit cost (COGS).
- Enter the expected cost increase (% or $ per unit).
- Set a target gross margin % (defaults to your current margin).
- Review the required new price and the implied price increase.
Example
Price is $100, cost is $65. Cost increases by 8%. Maintain the current gross margin.
- Current margin% = (100−65)/100 = 35%
- New cost = 65 × 1.08 = 70.20
- Required price = new cost ÷ (1 − 0.35) = 108.00
- Required increase = 8.00%
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