Competitor Index Calculator
Are your prices beating the competition or quietly bleeding margin? The competitor index turns any price comparison into one number: 100 means parity, above 100 means you are the cheaper option, and below 100 means the competitor is. This calculator works three ways: a single product index, a basket average across up to five products, and a target price solver that works backwards from the index you want.
Compare like with like: same product, same pack size, and the same landed basis (shelf price plus shipping and fees) on both sides. A mismatched pair produces a precise number that means nothing.
Quick Answer
Key takeaways
- Index = (competitor price / your price) x 100. Above 100 you are cheaper, below 100 the competitor is, and 100 is exact parity.
- The basket index is a simple average of per-product indices, so one weak product cannot hide: the results table shows every product's own index next to the average.
- Two conventions exist in the wild, and some sources flip the ratio. Pick one, write it down, and never mix them in the same report.
- The index says nothing about margin. Being 20% cheaper is only good news if the price still clears your costs.
How to use the competitor index calculator
Pick a mode first. Single product mode is the everyday check: enter the competitor's price and yours, and you get the index, the cash gap between the two prices, and a plain reading of what the number means. Basket mode is the catalog check: fill in up to five matched products, and the calculator averages their individual indices and prints the per-product table, so you can see which line is dragging the average down. Rows left blank are ignored, and a row only counts when both prices are present and yours is above zero.
Target price mode runs the formula in reverse. Enter the competitor's price and the index you want to sit at, and it returns the exact price to charge. That is the mode to use before a repricing meeting, because it converts a vague goal like "be about 10% under them" into a shelf price: index 110 against a $120 competitor means charging $109.09. Run the single mode afterwards on any price you are considering, as a sanity check that the shelf price and the index still agree.
The competitor index formula, and the convention trap
One division, scaled to 100. The competitor's price goes on top and yours on the bottom, which is why the reading feels backwards the first time you meet it: a bigger index is better news for you.
The convention trap is real. Industry guides such as the Retailgrid retail price index guide warn that some teams flip the ratio and put your price on top, which reverses every reading. Under the flipped version, 120 would mean you are 20% more expensive. Both conventions circulate in pricing software and board reports, so the first job in any pricing review is confirming which one a number uses. This page, and this calculator, always use competitor-on-top: above 100 means you are cheaper.
| Index | Reading | Typical response |
|---|---|---|
| Under 80 | Competitor far cheaper | Check for a mismatched product or pack size first, then decide whether to match, differentiate, or drop the line |
| 80 to 95 | Competitor cheaper | A small price cut, a bundle, or a stronger value story usually closes this gap |
| 95 to 105 | At parity | Price is not your problem or your edge here; compete on availability, delivery, and trust |
| 105 to 120 | You are cheaper | Hold if volume responds; check whether you are leaving margin on the table |
| Over 120 | You are far cheaper | Room to raise prices, or to invest the spare margin in service and stock depth |
Worked examples in all three modes
The calculator is pre-filled with these exact figures, and every result below is what it returns.
| Mode | Inputs | Result |
|---|---|---|
| Single product | Competitor $120, yours $100 | Index 120.00, gap $20.00, you are cheaper |
| Basket (3 of 5 rows) | Trail shoes $120 vs $100; Running shorts $80 vs $85; Gym bag $50 vs $45 | Average index 108.41 |
| Target price | Competitor $120, target index 110 | Charge $109.09 |
The basket is the interesting case. Its per-product indices are 120.00, 94.12, and 111.11, which average to 108.41: cheaper than the competitor overall, with one clear weak spot. The running shorts are the only line where the competitor undercuts you, and at 94.12 the gap is small enough that a modest cut or a bundle offer fixes it. Without the per-product table, the healthy 108.41 average would have hidden that completely.
Bar lengths are scaled to the highest index (120.00 = full width). The shorts bar is the only one sitting below the parity line of 100, which is exactly the pattern to scan for in your own catalog.
Reading a basket index without fooling yourself
A simple average treats a slow-selling accessory the same as your flagship product. That is the honest limitation of the basket mode here, and pricing platforms such as Competera describe the same fix used by larger retailers: weight each product's index by how much it actually sells, so the average reflects revenue rather than row count. If one product drives half your sales, compute its index on its own and read it separately from the basket. The average is a dashboard number; the money sits in the individual rows.
Two more disciplines matter. First, compare landed prices: a competitor who charges $5 less and $7 more for shipping is not cheaper, and the index will happily tell you they are if you feed it shelf prices on one side and delivered prices on the other. Second, watch the margin side of every move. Undercutting to chase an index of 115 feels decisive until the blended margin calculator shows what the new mix does to overall profitability, and a price cut that wins the index while losing money on every unit is a slow way to go broke. Pair the index with a sales trend check in the comparable sales growth calculator after any repricing: if the index improved and sales did not move, price was never the binding constraint. Teams that also track promotional intensity can cross-check with the advertising to sales ratio calculator, since heavy discounting often shows up there before it shows up in margin reports.
What competing calculators miss
Most competitor index tools on the web do the single division and stop. Checking the top results for this keyword, three gaps kept recurring.
Miss 1: no basket, no table. A one-product answer cannot describe a catalog. The basket mode here averages up to five matched products and prints each product's own index, because the average on its own conceals the exact product that needs attention.
Miss 2: no reverse solver. Knowing you sit at 108 does not tell you what to charge to sit at 110. The target price mode inverts the formula, which is the calculation pricing teams actually run before changing a shelf edge.
Miss 3: no convention warning. Tools and guides that flip the ratio without saying so produce numbers that look identical and mean the opposite. This page states its convention in the formula, the results, and the FAQs, and the interpretation text under every result repeats which side is cheaper.
One honest limit: five products is a sample, not a catalog audit, and the basket average is unweighted. For a full assortment, run the basket in groups by category, and weight the important groups by revenue in your own notes, the same discipline the 20 percent margin calculator applies when it checks whether a target margin survives a price change.
Frequently Asked Questions
95 to 105 is parity territory; above 110 you compete on price, below 90 the competitor does. Track the trend, not just the level.
Several, separately. A per-competitor average index shows who actually pressures your pricing. One blended number across rivals hides the competitor who is undercutting you on your best sellers.
Only if you include them. Compare landed prices on both sides: the shelf price plus the shipping or fees a buyer actually pays. A product can win on shelf price and lose on the delivered price.
Weekly for dynamic categories, monthly for stable ones, or after any repricing event, yours or a competitor's. The index is a tracking metric, so a consistent schedule matters more than a perfect one.
Yes, with extreme gaps. Below 50 the competitor charges less than half your price; above 200 you charge less than half of theirs. Both extremes usually signal a mismatched product, a different pack size, or a data error worth checking before a pricing panic.
There are two conventions. This calculator puts the competitor price on top, so above 100 means you are cheaper. Some sources flip the ratio, and then above 100 means you are more expensive. Neither is wrong, but mixing the two in one report is the most common way price index numbers get misread.
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References
- Retailgrid, "How to calculate a price index: retail guide" - matched-pair method, per-item price relatives, and the warning about mixing the two index conventions. Retailgrid: How to calculate a price index. Accessed October 2026.
- Pricefy, "Price Index: Definition, Formula and How to Calculate It" - the competitor-over-your-price convention used in e-commerce pricing, with CPI distinguished from competitive price indices. Pricefy: Price Index definition and formula. Accessed October 2026.
- StoreSentry, "Build a Competitor Price Index for Shopify" - reference-price choices (median, lowest, average) and revenue weighting for basket indices. StoreSentry: Build a competitor price index. Accessed October 2026.
- Competera, "Price index formula: how to calculate the price index and track competitor price impact" - per-product and market average index formulas for retail pricing teams. Competera: Price index formula. Accessed October 2026.