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Discount and margin calculator

A price, a discount and your cost. The sale price, the margin left after the discount, and how many more units you have to sell to make the same profit as before.
Sale price
US$80.00
Margin after discount
50%
Extra sales needed for the same profit
50%

How it is calculated

Sale price = price × (1 − discount).

Extra sales needed = profit per item before ÷ profit per item after − 1.

A 20% discount on a 60% margin product needs 50% more sales to stand still. If the discount is larger than the margin, every sale loses money and no volume fixes it.

Questions

How much does a discount really cost?

More than its percentage. The discount comes entirely out of your profit, not out of the price as a whole, so a 20% discount on a 40% margin halves the profit on each sale.

Are percentage or fixed-amount discounts better?

For the same cost to you, shoppers tend to read “$20 off” as larger on expensive items and “20% off” as larger on cheap ones. What matters for you is the margin left, which this calculator shows either way.

When is a discount worth it?

When it brings sales you would not otherwise have made — new customers, a clearance of dead stock, a basket that grows. Discounting to people who would have paid full price is pure margin given away.

If you run WooCommerce

WooGroupie only unlocks a group price once enough people have committed, so the discount is paid for by the volume it creates. WooGroupie is our plugin; the calculator above works the same whether you use it or not.

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