How It Works
Three simple steps to get accurate calculations
1
Enter Current Pricing
Input your current price and profit margin.
2
Set Proposed Discount
Enter the discount percentage you're considering.
3
Estimate Conversion Lift
Predict how much sales volume will increase.
4
Review Profitability
See if the discount math actually works.
Loading Discount Without Losing Money Calculator...
Frequently Asked Questions
How do I calculate if a discount is profitable?
Calculate: Breakeven lift = original margin ÷ discounted margin - 1. Example: 40% margin, 15% discount = 25% new margin. Breakeven = 0.40/0.25 - 1 = 60% more sales needed. If you expect less lift, the discount loses money.
What's a safe discount to offer?
Rule of thumb: Never discount more than half your margin. At 40% margin, max 20% discount (leaves 20% margin). At 30% margin, max 15% discount. Deeper discounts require massive volume increases.
Why do small discounts require big sales increases?
Math is brutal: A 10% discount on 40% margin cuts profit per sale by 25%. You need 33% more sales just to break even. At 20% discount, profit drops 50%, requiring 100% more sales. This is why most discounts lose money.
When should I offer discounts?
Good reasons: Clear excess inventory, acquire strategic customers (with LTV math), seasonal slowdowns (some revenue > none), competitive response. Bad reasons: "Everyone does it," gut feeling, customer pressure.
What are alternatives to discounting?
Better options: Add value (bundle, warranty), tiered pricing, loyalty programs, limited-time bonuses, payment terms. These protect margin while providing customer incentive.
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Results are estimates for informational purposes only. Consult professionals for important decisions.