Two ways to pass on a cost increase
When a supplier raises your cost, you have two reasonable targets for the new price, and they give different answers.
Keeping your margin means the price goes up by the same percentage as the cost. Keeping your profit per unit means the price goes up by the same number of cents as the cost.
Example. An item cost you $1.20 and sells for $1.99, a 39.7% margin. The cost goes up to $1.32, a 10% increase.
To keep a 39.7% margin, the new price is $2.19 (up 10%).
To keep making $0.79 a unit, the new price is $2.11 (up 6%).
Leave the price at $1.99 and your margin drops to 33.7%.
Which one to choose
Keeping the margin protects your percentages on the books. Since costs keep rising, holding margin is how your gross profit keeps pace over time. Keeping the profit per unit is gentler on shoppers, and it's often enough when you're worried that a bigger jump will slow sales.
Many retailers land somewhere between the two, then round to a familiar price ending. To see the margin at a rounded price, enter your new cost and that price in the markup and margin calculator.
Check the whole category
A cost increase often hits a whole brand or category at once. Before you reprice, look at what nearby items and competitors charge, and check whether your price ladder still makes sense, with bigger sizes costing less per ounce. The unit price calculator makes that quick.
Common questions
- Why does keeping my margin raise the price by more than the cost went up?
- Because your margin is a percentage of the price. To keep the same percentage, the dollar profit has to grow too. In the example, the cost went up 12 cents and the price goes up 20 cents.
- What if I price from a case cost?
- Use the case cost calculator to turn the new case cost into a per-unit cost, then enter it here.
Last updated October 11, 2026.