1. Prepare the review boundary
- Name the product, service, channel or customer segment in scope. (not complete)
- Choose one comparison period and currency. (not complete)
- Record whether every amount is before or after indirect tax. (not complete)
- Assign an owner and source date to every changed input. (not complete)
- STOP if the sales, cost or unit boundary cannot be reproduced. (not complete)
2. Rebuild the retained economics
- Refresh direct and variable unit costs from current records. (not complete)
- Make any shared-cost allocation visible and documented. (not complete)
- Recalculate contribution, margin and markup with labelled denominators. (not complete)
- Reconcile discounts, channel fees, returns and fulfilment once each. (not complete)
- STOP if a cost is missing, duplicated or on a different period basis. (not complete)
3. Stress-test the proposed price
- Compare a base, downside and upside contribution scenario. (not complete)
- Calculate discount-recovery and price-volume thresholds. (not complete)
- Compare required volume with capacity, stock and credible demand. (not complete)
- Review total contribution as well as weighted margin when mix changes. (not complete)
- STOP if viability depends on an unsupported demand or benchmark claim. (not complete)
4. Complete a durable review record
| Field | Record before approval |
|---|---|
| Decision owner | Name or role responsible |
| Input date | Date records were checked |
| Selected scenario | Price, cost boundary, margin/contribution and period |
| Rejected alternatives | Why other scenarios were not selected |
| Known limitations | Demand, capacity, data or classification uncertainty |
| Review trigger | Date or event that requires another review |
Use events and a chosen cadence as review triggers
| Trigger category | Evidence to bring | Review action | Owner | Outcome or stop point |
|---|---|---|---|---|
| Input cost or supplier term changed | Source-dated invoice, quote or agreement on the current unit and tax basis | Rebuild contribution and compare response options | Named pricing or purchasing owner | Approve a scenario or stop until the changed input is reconciled |
| Offer, scope or service level changed | Before-and-after deliverables, time and cost boundary | Reprice the comparable offer rather than only changing the percentage | Named offer owner | Record the new scope or stop when the comparison is not like-for-like |
| Discount, fee, returns or channel mix changed | Realised-price and per-order records for one period | Reconcile each deduction once and rerun total contribution | Named channel owner | Retain, revise or stop the channel scenario |
| Capacity or step cost changed | Current constraint, available units and step-cost trigger | Test whether required volume remains operationally feasible | Named operations owner | Approve within capacity or stop before the next cost step |
| Business-chosen scheduled review | Last approved decision record plus current inputs | Confirm that no material assumption has gone stale | Named decision owner | Retain the price or open a triggered review; no universal cadence is implied |
Methodologies used
- Target Margin & Pricing methodology — Margin101
- Price-Volume Trade-off methodology — Margin101
Related tools
- Target Margin & Pricing Planner
Set a price for a target gross margin
- Discount Profit Impact Planner
Find whether added volume can recover profit after a discount
- Price–Volume Trade-off Planner
Find the sales volume needed to preserve contribution after changing price
- Product Mix Profit Planner
Compare contribution when the volume mix changes across products