Discount Profit Calculator

It compares your profit per unit before and after a discount, then works out how much more you'd have to sell to make the same total profit. You enter your full price, unit cost, the discount %, and your channel fee. The tool computes your contribution margin (price − cost − fee) at both prices, divides the old margin by the new one to get the extra volume you need, and shows the deepest discount you can run before each sale loses money. Everything is per unit, so it works in any currency.

Usually far more than the discount itself. The required sales lift is your old contribution margin divided by your new one, minus one. Example: a $30 product costing $12 with a 15% fee makes $13.50 profit per unit. Take 20% off and it makes $8.40. You need $13.50 ÷ $8.40 ≈ 1.6× the volume — about 60% more sales — just to break even on profit, not 20%. The lower your starting margin, the bigger the lift a discount demands.

Because the discount comes out of your profit margin, not your revenue. When you drop the price 20%, your costs don't fall by 20% — your unit cost stays exactly the same. So the entire price cut is subtracted from the (much smaller) margin. If your margin per unit was 40% of the price, a 20% cut can erase roughly half of it, which means you need to nearly double your sales. This is the single biggest mistake sellers make when planning promotions, and it's why this discount margin impact calculator exists.

The biggest discount that still keeps your price at or above break-even — the point where profit per unit hits zero. Break-even price is your unit cost grossed up for the channel fee: cost ÷ (1 − fee rate). The max safe discount is then (1 − break-even price ÷ full price) × 100. On a $30 product costing $12 with a 15% fee, break-even is about $14.12, so the deepest safe discount is roughly 53% off. Go beyond it and every sale loses money no matter how many units you move.

Contribution margin is the profit from one sale after only its variable costs — cost of goods plus the channel/payment fee — but before fixed costs like rent or salaries. It's the right lens for a promotion because a sale doesn't change your fixed costs; it only adds (or loses) contribution margin. By comparing the contribution margin before and after the discount, you see exactly how much each promo sale really earns and how many you need to come out ahead.

Yes — fees are usually the difference between a promo that profits and one that doesn't. On Amazon, eBay, Etsy, or Shopify the fee is a percentage of the sale price, so it shrinks a little when you discount, but it still takes a meaningful cut of an already-thinner margin. Enter your fee in the "Channel / Payment Fee" field (Amazon ~15%, eBay ~13.6%, Etsy ~9.5%, Shopify ~2.9%) and the calculator deducts it from both the before and after margins.

No. Sales tax, VAT, and GST are collected from the buyer and remitted to the government — that money is never yours and is not a cost, so including it would distort your margin and make safe discounts look unsafe. Leave tax out entirely. Because the tool works on per-unit margins and ratios rather than tax-inclusive totals, it gives the same correct answer whether you sell in the US, India, the UK, the EU, or anywhere else.

If the discounted price drops below your break-even price, your profit per unit goes negative and the calculator warns you that every promo sale loses money. At that point no amount of volume helps — selling more just multiplies the loss. The tool shows your max safe discount so you can pull the markdown back above break-even, unless you're deliberately running a loss leader to attract buyers who also purchase profitable items.

Yes. Enter your current sales volume in the optional "Units You Sell Now" field — per week or per month, whatever you track. The calculator then converts the percentage lift into a hard number of extra units you must sell during the promo to break even. It's a useful reality check: if hitting that number in the promo window looks unrealistic, the discount is probably too deep.

They're mirror images. A selling price calculator works forward: you pick a target margin and it tells you the price to charge. This discount profit calculator works backward: you pick a price cut and it tells you the sales lift it requires and the floor you must not cross. Use the selling price tool to set your everyday price, then use this one whenever you plan a discount, coupon, or flash sale on top of it.