Discount Impact on Margin Calculator
See how much a discount cuts your profit per unit and how many more units you must sell just to earn the same gross profit.
Inputs
Margin impact
More units needed to keep the same gross profit
A 20% discount can double the volume you need
Take a $100 product that costs you $60 to make or buy, leaving $40 of profit per unit. A 20% discount drops the price to $80 and the profit to $20, cutting profit per unit in half. To earn the same gross profit as before, you have to sell twice as many units. Few promotions deliver that kind of lift.
How the calculator works
Enter the original price, your unit cost and the discount. The calculator shows profit per unit before and after, the profit lost on each sale, and how your gross margin percentage changes. The headline number is the extra unit volume you need for total gross profit to stay where it was: profit per unit before, divided by profit per unit after, minus one.
The comparison table runs the same math across common discount levels, so you can see how quickly the required lift grows as the discount gets deeper. The lower your margin, the faster it climbs.
Frequently asked questions
Should I ever discount?
Yes. Discounts make sense for clearing old stock, winning new customers who will buy again, or responding to a competitor. Just go in knowing what the discount really costs.
Does this include other costs like shipping or ad spend?
No, it uses the unit cost you enter. If each sale also carries shipping, payment fees or ad costs, add them to the unit cost for a truer picture.
What if the discount brings in new long-term customers?
Then the first order is only part of the story. Compare the extra profit you need here with the lifetime value of the customers the promotion brings in.