If you reduce the price by 5%, how much more do you have to sell to get to the same place?

We often need to accelerate sales intensively in the short term. One of the options that has the most impact and moves the needle fast is price reductions. However, despite the almost instantaneous increase in volume, a 5% price reduction requires an increase in volume of almost 18%. This amount is the minimum, on average, to ensure that the company reaches the same operating profit as before the change.

The ideal scenario is to have a strategy designed with the best combination of price and volume, with the main focus on maximizing the company’s profit.

To do this, it is essential to measure the elasticity of each product, to have good information on market prices and to understand the behavior of the industry and the economy.