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Price Benchmarking Index Calculator

Work out price benchmarking index instantly with clear inputs, formula shown and shareable results.

About Price Benchmarking Index Calculator

A price index of 100 means you pay the benchmark median. Converting the gap into an annual value at your volume is what turns a benchmarking observation into a business case, and the lower-quartile gap sets the stretch target for a sourcing event.

Formulas

Price index

Index = Your price / Benchmark median x 100

Annual gap

Gap = (Your price - Benchmark price) x Annual volume

Worked example

With the default values below, Price Benchmarking Index Calculator returns Price index against the benchmark median of 107.25. Change any input above and every figure here is recalculated in your browser.

Inputs used

Your price paid
740
Benchmark median price
690
Benchmark lower quartile price
645
Annual volume
84,000

Results

Price index against the benchmark median
107.25
Annual value of the gap to median
$4,200,000.00
Annual value of the gap to lower quartile
$7,980,000.00
Positioning
Above market — negotiation opportunity

Step by step

  1. 1Values used
  2. 2Price index
  3. 3Annual gap
  4. 4Price index against the benchmark median= 107.25
  5. 5Annual value of the gap to median= 4,200,000.00
  6. 6Annual value of the gap to lower quartile= 7,980,000.00
  7. 7Positioning= Above market — negotiation opportunity

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How comparable must the benchmark be?

Very. Specification, volume, lead time, payment terms and service level all move price, so an unadjusted benchmark overstates the opportunity.

Should I target the lower quartile?

As a stretch, yes, but only if you can match the conditions that lower-quartile buyers accept — usually larger volumes and fewer variants.

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