Discount profit calculator
Discounts do not cost you the discount. They cost you the discount on every unit you would have sold anyway.
- Break-even uplift needed
- 100.0%
- Profit without discount
- €7,194
- Profit with discount
- €4,856
At your expected uplift this promotion costs you €2,338 in contribution. You need 100.0% more volume just to break even.
The formula
- Break-even volume uplift % = discount % / (contribution margin % − discount %) × 100.
- Profit with discount = price × (margin % − discount %) × units × (1 + uplift %).
- If the discount exceeds the contribution margin, no volume increase makes the promotion profitable.
Worked example
A €59.95 product with a 40% contribution margin sells 300 units, producing €7,194 in contribution.
At a 20% discount, unit contribution halves to €11.99, so the promotion needs 100% more volume just to stand still.
At a realistic 35% uplift it produces €4,852 — €2,342 less than selling nothing at all on discount.
How to use the result
- ◆Use contribution margin, not gross margin, or the break-even looks far too easy.
- ◆Run it per product. A sitewide code lands on items with very different margins.
- ◆Set a maximum discount per product from the result and enforce it in your promotion rules.
Frequently asked questions
Why does a 20% discount need so much extra volume?+
Because the discount comes straight out of margin, not out of price. At a 40% margin, 20% off removes half of what you earn per unit.
Do acquisition discounts change the maths?+
They can, if the customer buys again at full price. Judge those on profit per customer over time rather than on the single promotion.