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BREAK-EVEN ELASTICITY
For low-margin SKUs, which is more likely to grow profit?
Break-evens differ by variable margin:
Decrease Price?
If drop price by 4%,
sales must increase more than 36% to grow profit.
Break-even elasticity of -9 (i.e., 36/-4)
B2B: Highly unlikely
B2C: Highly unlikely
Change in Price
Break-even change in sales
Increase Price?
If raise price by 4%, sales must decline less than 21% to grow profit.
Break-even elasticity of -5.25 (i.e., -21/4)
B2B: Very likely
B2C: Very likely
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