← Pricing & Promotion

Tool · Layer 2: Try it

Will your price change pay off?

A discount needs more sales. A price increase can tolerate fewer. Find the tipping point before you decide.

Try a worked example

Your starting point

Use one product and the same selling period throughout.

A planning average is fine, e.g. 37.5 a week. Keep the same period for every quantity.Add the costs you incur per sale. For example, $13 to buy the item plus $2 to fulfill the order gives $15 per unit before any shipping subsidy or expected return costs. Enter percentage fees separately.
Fees, campaign costs & stockCharged on each option’s own selling price, so they fall when you discount. Exclude sales tax and anything already in the unit cost. Fixed per-order fees, tiered fees and channel-specific rates are not modelled.Added to every option equally, including one at today’s price. The baseline — no price change, no campaign — never includes it.Physical units you can sell this period (whole number). A simple cap: if stock arrives during the period, timing needs a separate review.

Prices to compare

These are alternatives, not simultaneous price changes. Keep today’s price as one option to see the unchanged reference.

What would need to happen?

You don’t need a demand forecast to calculate the hurdle: the units each option needs to maintain today’s contribution.

How much could sales change?

Give each price its own range.

Not sure? The hurdles above are still useful. You can explore ranges without treating them as forecasts.

Turn the calculation into a decision

Know the hurdle. Then investigate the response.

  1. Check the economics. Reconcile realized prices, fees and returns.
  2. Check the market. Compare equivalent delivered offers and availability. Consider why customers choose you.
  3. Choose a bounded test. Record price, sales, availability, traffic and other promotions. Review contribution and related-product effects.
What would a deeper pricing review add?

Evaluate your sales history, competitive position, promotion design and inventory constraints; then select prices worth testing and an appropriate comparison. A sales change alone does not identify the effect of price.

The assumptions explainer sets out what this calculation does and does not cover.

The summary lists your inputs, units, fees, assumptions and the tool version.