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Supplier performance and risk
Supplier price increase calculator
Enter your yearly volume, the current price, the increase and your selling price. You get the added cost, the new unit cost and the margin impact.
A price increase costs you the rise per unit times your volume. At the default numbers a 6 percent rise adds USD 34,800 a year and lowers your margin by 3.6 points.
Written by Procurement VMS Editorial Team · Reviewed by Michael, Procurement Advisor Expert · Updated
Your numbers
The boxes start with an example so you can see how it works. Replace them with your own figures.
Your result
The rise adds USD 34,800 a year and lowers your margin from 12.5% to 8.9%. To keep the old margin you would need to charge USD 24.99 per unit.
| New price per unit | USD 15.37 |
|---|---|
| Added cost per year | USD 34,800 |
| Margin today | 12.5% |
| Margin after the increase | 8.9% |
| Margin points lost | 3.6 |
| Selling price that restores the old margin | USD 24.99 |
The currency box changes the label only. Enter amounts in the currency you choose.
Free PDF and Excel
Save this result as a PDF guide and an Excel model
Free to download. You enter your name, work email and phone number, and the files are ready at once.
- PDF guide with the formula, a worked example and a checklist of what to enter
- Excel model with live formulas, so your own numbers recalculate at once
- Ready at once after the form, with no account to create
The files open with the example numbers from the page. Type yours over the blue cells in the Excel file. The calculator on this page is free to use without a form.
How the supplier price increase calculator works
The formula
Added cost = price x increase x volume. New margin = (selling price - new supplier price - other cost) / selling price.
A supplier rise of a few percent can erase far more of the margin than it appears to, because the margin is a thin slice of the selling price. The calculator turns the rise into yearly cost and margin points so the conversation moves to numbers.
Use the result to decide your response: accept it, push back with evidence, find another source, or pass the increase on. Each has a cost, and this shows you the baseline.
The example numbers are illustrative and are not benchmarks. Use your own data for any decision.
How to use it with your own data
- Enter the volume and the price you pay now, plus the rise being proposed.
- Add your selling price and other cost per unit to see the margin effect.
- Compare the cost with the saving from other levers, such as alternative suppliers or spec changes.
Mistakes that skew the answer
Taking the increase at face value
Ask for the cost build-up behind the rise and compare it to published indices.
Ignoring volume commitments
A rise may be tied to a volume tier. Check whether moving up a tier lowers it.
Forgetting the knock-on cost
Freight and duty are often charged as a percent of price, so they rise too.
What to do with the result
Test your counter with the negotiation savings calculator, set a limit on future rises using the price escalation clause calculator, and check alternatives with the supplier switching cost calculator.
Questions about the supplier price increase calculator
How do I respond to a supplier price increase?
Ask for the cost drivers, compare them with market indices, and consider volume, term or spec changes in return for a smaller rise.
How much margin does a price rise cost?
It depends on the share of the supplier in your unit cost. The calculator shows it for your numbers.
Should I pass the increase to customers?
Sometimes. The calculator shows the selling price you would need to keep the margin.
Can I refuse the increase?
You can negotiate or switch, but contracts may set notice and rise limits. Read yours first.