What to do next
Show the working, step by step
Where I used this
At Praava Health, rebuilding referral and pricing logic around transparent economics moved lab margins from about 30% to about 50%.
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Why price moves profit so much
A price rise drops straight to profit, because the cost of making the product does not change. That is why a small increase can absorb a surprising loss of customers, and why a small discount needs a large jump in volume to pay for itself. The lower your margin, the stronger both effects become.
The calculator assumes your variable cost per unit stays the same. It does not predict how many customers you will actually lose: that depends on what your price tells people about you. Pricing is positioning, not a spreadsheet.
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Thinking about raising prices?
Bring your margins to a free 30-minute call. At Praava Health, rebuilding pricing logic moved lab margins from about 30% to about 50%.
Questions
How many customers can I lose after a price increase?
Divide the price increase by your margin plus the increase. At 40% margin, a 10% rise breaks even if you lose up to 20% of volume.
Why do discounts need so much extra volume?
Because a discount comes straight out of margin. At 40% margin a 10% discount leaves 30 points of margin, so you need a third more volume to earn the same profit.
What margin should I use?
Contribution margin: price minus the variable costs of each sale. Leave out fixed costs like rent and salaries, which do not change with volume.