When Should You Raise Product Prices After Costs Increase?

Review product prices when rising purchasing, shipping, or operating costs reduce margins below your target, especially when cost increases are expected to persist. Before repricing, examine the cost of goods sold, existing inventory, competitor prices, and customer price sensitivity.

Calculate a target selling price using Unit Cost ÷ (1 − Target Gross Margin). If unit cost reaches 80 and the target margin is 30%, the price is approximately 114.29. Monitor sales volume and total gross profit after the change. Try Cash Cloud for free to explore purchasing, sales, and profitability reporting tools.