Margin With Discount Calculator

Your details

The cost to produce or purchase one unit. This stays fixed when you apply a discount.
USD
Your target gross margin percentage at full price. Margin = (Price - Cost) / Price x 100.
%
The percentage you are taking off the full selling price. Example: 15 means the customer pays 85% of the list price.
%
Price after discountHealthy margin
85USD

What the customer actually pays.

Base price (before discount)100USD
Profit per unit25USD
True margin (after discount)29.41%
True markup (after discount)41.67%
Base markup (before discount)66.67%
Sales volume increase needed to break even60%
List price100
Discounted price85
Profit per unit25
29.41% %
Loss<0Tight0-15Healthy15-35Strong35+

True margin after 15% discount: 29.41%

  • A 15% discount reduces your gross margin from 40.0% to 29.41%, a drop of 10.59 percentage points.
  • You keep $25.00 of profit per unit at the discounted price of $85.00.
  • To earn the same total profit as before the promotion, you need to sell 60.0% more units.

Next stepYou need a 60% volume lift to break even on this promotion. Verify your demand forecast can deliver that before committing.

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