Does pricing at 99 instead of 100 really change my margin?
It does, and how much depends on your starting margin. The unit you give up comes entirely out of profit, so it hardly registers on a product with a 40% margin and takes a tenth of the profit on one with 10%. Enter both prices with the same cost in the calculator to see the gap in your case.
The comparison on two different products
Open the Profit margin calculator and try one product with a comfortable margin and one with a thin margin:
Cost 60 and price 100: profit 40, margin 40%. At 99: profit 39, margin 39.39%.
Cost 90 and price 100: profit 10, margin 10%. At 99: profit 9, margin 9.09%.
Either way you lose one unit of currency per sale. On the first product that is 2.5% of your profit; on the second it is 10%. The margin fell by less than a point in both cases, which is what makes it deceptive: one point off a thin margin is worth far more than a point off a fat one.
How many extra sales pay back that one unit?
If the idea behind 99 is that it sells more, the question is how many more. To earn the same total profit:
- On the first product you need about 2.6% more sales, because 40 ÷ 39 is roughly 1.026.
- On the second you need about 11.1% more sales, because 10 ÷ 9 is roughly 1.111.
Nobody can say in general whether a 99 price will lift your own sales by that much. The calculator gives you the threshold, and a test in your store tells you whether you clear it.
The other direction: 109 instead of 100
Sometimes the more useful question is whether to move up to an acceptable-looking number above 100 rather than dropping below it. With a cost of 90, a price of 109 gives a profit of 19 and a margin of 17.43%, nearly double the profit at 100. Going down to 95 instead leaves just 5 and a margin of 5.26%. On thin-margin products, small pricing choices decide whether the item is worth selling at all.
A quick way to decide
- Enter the cost and two candidate prices, and note the profit for each.
- Divide the higher profit by the lower to get the extra sales you would need.
- If your margin is thin, charm prices under a round number may cost more than they bring. Look at raising the price or cutting the cost first.
- If a marketplace takes a percentage of the price, work out both prices with the Selling-price calculator, because the fee moves with the price too.
Common questions
Does 99 sell better than 100?
There is no general answer that holds for every store. Test it on your own products, and use the calculator to know how big a sales lift you need for it to pay.
Is the difference worth checking on a cheap item?
On a product priced at 10, one unit less is a 10% discount, and its effect on profit is huge. Always check it.