Pricing ROI Calculator

The expected net return of a pricing programme, and the point where it pays back.

Scope

A comma separates thousands (1,234). Use a point for decimals, e.g. 1.5.

The realignment is read as margin points gained on the gross margin rate (margin on selling price), at constant purchase cost. The price needed to deliver them is derived, not entered.

Product families

Family A
Family B
Family C
Family D

Elasticity is negative (minus sign allowed): at minus one, a one-point price rise costs one point of volume. A share of zero removes the family from the calculation. The shares must add up to 100%.

Implementation

Costs are spread over the deployment lead time, during which the benefit stays at zero. It then rises in a straight line over the ramp-up period. Entries stay in the browser and disappear when the tab is closed.

Annual net benefit, steady state
0
Break-even
0
reading

The three terms

Gross margin effect
0
Volume effect deducted
0
Net benefit
0

By family

Effect of the realignment by product family
Family Revenue share Elasticity Price change Volume change Annual benefit

Cumulative cash, thirty-six months

Robustness test

Break-even under three elasticity assumptions
Elasticity assumption Average elasticity Annual net benefit Break-even

What this calculation does not say
1. The elasticity entered is an assumption: borrowed from another market, another retailer or another season, it does not transfer.
2. It is held constant across the whole realignment, whereas it bends at psychological price points and beyond roughly ten points of movement.
3. No competitive response enters the calculation: a fast match by the main competitor removes the volume effect and leaves the committed costs in place.
4. Costs cover the project, not the steady state: rule maintenance, competitor price feeds and recurring arbitration run every year after go-live.