The Unit Price is the price of a standard unit of a product.

The Unit Price is a measurement that helps consumers compare the prices of different products.

They are commonly used by stores to help customers compare products and make better purchasing decisions.

The Unit Price is also a metric that business owners and managers use to measure the total sale value of an item or product.

In this article, we will discuss what is unit price, why it matters when shopping, and some things to watch out for when making buying decisions.

What is Unit Price A Guide in Minutes AMPLIFY XL
What is Unit Price?
(Image Source)

What does Unit Price mean?

The Unit Price is the price of a standard unit of measure of a product.

A standard unit can be a kilo, a pound, a liter, an ounce, or any other measure that is standard in an industry or a field.

In the business world, for example, it is customary to measure human labor “per hour”. In this case, the standard unit used is “1 hour” and the Unit Price is the hourly rate.

Finding the Unit Price is a simple calculation that can help you compare the prices of different products using the same measuring scale. In short, by comparing Unit Prices you are comparing “apples to apples”.

Unit Prices are common amongst groceries sold as packages such as cheese blocks, chocolate bars, and bags of rice, onions or potatoes. They are also applicable to other products including those in the business world.

As compared to the Retail Price, the Unit Price is a useful tool in making your shopping decisions as it allows you to easily compare prices between items and find out which one has the lowest price per unit.

Examples of Unit Price

Unit Prices of Cooking Oil

Let’s say that you’re at a grocery store and are considering buying the cheaper of two brands of Canola Oil.

Let’s call these ‘Brand A’ and ‘Brand B’. Both brands have bottles in different sizes.

Brand A has a smaller bottle which costs $2.88

Brand B has a larger bottle which costs $7.16

At face value, the smaller bottle seems cheaper, right?

While that may seem true if you just look at the Retail Price, to truly compare the prices of the two brands, you need to compare their Unit Prices. To calculate Unit Prices, you need to know the volume (or Units) of each bottle.

When you look closer at each bottle, you find that the smaller bottle from Brand A holds 48 fl. Oz. of oil while the larger bottle from Brand B has 1 Gallon of oil. 1 Gallon equals 128 fl. Oz.

Now, using 1 fl. Oz. as the Unit we can calculate the Unit Price of each Brand:

For Brand A:

Unit Price = $2.88 / 48 fl. Oz. = 6.0 cents / fl. Oz.

For Brand B:

Unit Price = $7.16 / 128 fl. Oz. = 5.5 cents / fl. Oz.

Unit Price for Brand A = 6.0 cents / fl. Oz.
Unit Price for Brand B = 5.5 cents / fl. Oz.

By comparing Unit Prices, we can tell that Canola Oil from Brand B in its 1 Gallon bottle is cheaper than the one from Brand A in its 48 fl. Oz. bottle.

Unit Prices of Product Animations

Let’s now turn to an example from the business world.

Let’s say you are in the market for animations to explain the working of your latest software product. You ask several animation and media companies for quotations.

Here’s what you get:

Company A quotes a price of $5000 per animation.

Company B quotes a price of $6000 per animation.

Company C quotes a price of $2500 per animation.

Let’s assume for this exercise that all animations are of the same quality.

So, at face value Company C seems to offer the best deal, right?

Well, that’s only true if the Unit you use to compare the three prices is “an animation”. So, on a “per animation” basis Company B is the most expensive and Company C is the least expensive.

But what if you wanted to compare the 3 quotes based on another Unit – “per minute of animated content”?

You go back to each company and ask them for the length of their animation.

Here’s what you get:

Company A – $5000 for an animation of 5 minutes.

Company B – $6000 for an animation of 7 minutes.

Company C – $2500 for an animation of 90 seconds (1.5 minutes)

Now if we compare the 3 prices on a “per minute” basis, here is the Unit Price of each:

CompanyPrice per animationNo. of minutes of animationPrice per minute of animation
Company A $50005$1000
Company B $60007$857
Company C $25001$1666

This comparison is based on Unit Price where the Unit is “1 minute of animation”.

It is clear that Company B which seemed the most expensive, is in fact, offering the best deal, while Company C, which seemed the least expensive, is offering the worst deal.

This example shows us why it is important to compare prices using the most appropriate Unit Price.

How to calculate the Unit Price of a product

Here are the 3 steps to calculate the Unit Price of a product:

  1. Select the Unit for which you wish to calculate the Price.
  2. Measure how many Units are there in the product.
  3. Divide the Total Price of the product by the Number of Units to get the Unit Price.

Let’s take an example.

What is Unit Price - Coffee beans
(Image Source)

Let’s say you decide to buy coffee beans in bulk. You go to your favorite coffee wholesaler and fill a large bag with beans of your favorite coffee.

You go to the check-out counter, pay the bill of $125 and leave.

Once you reach home, you begin to wonder how much you actually paid for a pound of coffee.

Here’s how you find that out.

Step 1 – Select the Unit

You’ve selected 1 Pound as the unit. You’re going to find the cost of the coffee per pound.

Step 2 – Measure the product

You put the sack of coffee beans on a scale. Let’s say it shows 10.4 lbs.

Step 3 – Divide the total price by the total units

Your total price for the sack of coffee beans was $125. And the sack weighs 10.4 lbs.

Ignoring the weight of the sack, the Unit Price = $125 / 10.4 lbs.

This gives:

Unit Price of coffee = $12 / lb

Of course, an easier way would have been to look at the Unit Price on the invoice. But that would have taken away the fun of doing this calculation. 😊

In any case, let’s now cover the topic of Unit Prices on invoices.

What does Unit Price on an invoice mean?

Most invoices will show you the total price you paid for a product. Many will also show you the Unit Price.

Let’s say you are planning to change all the lights in your office, and you purchase 150 bulbs from a home décor company.

The Unit Price of a bulb is $4.52.

So, the total cost of purchasing 150 bulbs will be 150 X $4.52 = $678.

The invoice will show you the Unit Price – that is the price you paid for a single bulb – and the total price for all 150 bulbs.

It’ll look something like this:

What does Unit Price on an invoice mean
Unit Price on an Invoice


  • The Unit Price is the price of a standard unit of a product.
  • The standard Unit can be any unit that is common in an industry.
  • In everyday life, we use Unit Prices to compare prices of products. For instance, at the grocery store we can compare the prices of products by comparing prices per-pound, per-ounce, per-liter, etc. In business, it is common to compare prices of human labor “per hour”.
  • The Unit Price can be calculated by dividing the Total Price of a product by the Number of Units that exist in that product.
  • Most invoices will show the Unit Price as well as the Total Price which is calculated as: Total Price = No. of Units X Unit Price.