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Discount and promotion profit calculator

A discount comes out of your profit, not your price. Enter the price, the cost and the discount to see the extra sales you need just to stand still.

Without VAT or sales tax.

Product plus per-sale costs the discount does not change: packaging, shipping.

Off the regular price.

Over the period the promotion runs.

Your forecast, as a % increase in units. Needs the units above.

Result

Fill in regular price, cost per unit, discount to see the result.

How it works

When you take 20% off, the whole 20% comes out of the profit on each sale. So you need more sales to make the same money, and the thinner your margin, the more you need. The calculator works out that sales increase and, if you enter a forecast, whether the promotion beats it.

discounted price =
  price × (1 - discount)
profit per unit before = price - cost
profit per unit after =
  discounted price - cost

sales increase needed =
  profit before ÷ profit after - 1
  (= discount ÷ (margin - discount))

units needed = units without the
  discount × profit before
  ÷ profit after

What each term means

Regular price
The full price, without VAT or sales tax.
Cost per unit
The product plus per-sale costs the discount does not change, such as packaging and shipping. Payment fees fall a little with the price; leaving them in is the cautious choice.
Discount
The share taken off the regular price.
Units without the discount
What you would sell at full price over the same period the promotion runs.
Extra sales you expect
Your own forecast of the increase in units the discount brings.
Sales increase needed
The increase in units at which the promotion makes exactly the same gross profit as full price.

What it compares: gross profit per unit, before and after the discount. If the promotion also changes a cost, such as free shipping above a threshold, enter the new cost per unit. For what a unit leaves after every cost, see the contribution margin calculator.

Source: Nagle, Müller and Gruyaert, The Strategy and Tactics of Pricing (Routledge): the breakeven sales change of a price cut (read 26 September 2026).

Worked example

Example numbers, round on purpose, not a real store:

Regular price
€50
Cost per unit
€20
Discount
20%
Units without the discount
400
Extra sales you expect
60%
  1. 1Discounted price: €50 × (1 - 20%) = €40
  2. 2Profit per unit: €30 before, €40 - €20 = €20 after
  3. 3Sales increase needed: €30 ÷ €20 - 1 = 50%
  4. 4Units needed: 400 × 1.5 = 600
  5. 5Profit without the discount: 400 × €30 = €12,000
  6. 6Profit with it, at 60% more sales: 640 × €20 = €12,800

In this example the promotion pays only because the forecast, 60% more sales, beats the 50% it needs. At 40% more sales it would make €11,200: €800 less than no discount.

Frequently asked questions

  • How much do sales need to rise to cover a discount?
    By the discount divided by what is left of your margin after it: discount ÷ (margin - discount), with both as shares of the price. With a 60% margin, 20% off needs 20 ÷ (60 - 20) = 50% more sales just to make the same profit.
  • Why does a small discount need so many extra sales?
    Because it comes out of the profit, not the price. On a product with a 30% margin, 20% off takes two thirds of the profit per unit, so you need three times the sales for the same profit: 200% more.
  • What if the discount is bigger than my margin?
    Then every discounted sale loses money, and no increase in sales makes up for it: more sales only add to the loss. The calculator says so instead of giving a sales target.
  • Which sales count as extra?
    Only the sales the discount causes. Customers who would have bought at full price anyway now pay less, which is a cost of the promotion, not a gain. Compare with a similar period, or hold the offer back from part of your list or some regions, to see what it actually added.
  • Does this include the longer-term effects of discounting?
    No. It compares one period with and without the discount. If buyers learn to wait for sales, or the promotion brings in customers who come back at full price, the picture beyond this period changes, in either direction.

In the glossary: profit margin.

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