Worked examples
Standard 25% promotion
| Original price | $80.00 |
| Discount | 25% |
| Sale price | $60.00 |
| Customer saves | $20.00 |
A quarter off the price — but often more than half of the profit.
Clearance at 60% off
| Original price | $45.00 |
| Discount | 60% |
| Sale price | $18.00 |
| Customer saves | $27.00 |
Deep clearance usually sells below cost — recovering cash, not profit.
Frequently asked questions
How much extra volume does a discount need to break even?
Required volume lift = margin ÷ (margin − discount). A product with a 40% margin discounted 20% must sell twice as many units just to earn the same total profit. If the discount meets or beats your margin, no volume can save it.
How do I stack two discounts (e.g. 20% off plus 10% off)?
Multiply, don't add: 20% then 10% off is price × 0.8 × 0.9 = 28% total off, not 30%. Run this calculator twice — the sale price of the first pass becomes the original price of the second.
Should I discount or offer free shipping instead?
Free shipping usually costs the merchant less than the equivalent percentage discount ($6 shipping on an $80 order is 7.5%) while converting comparably in many stores — customers overvalue it. Test both; never run both at once by default.
Do frequent discounts hurt long-term pricing power?
Usually. Customers learn the rhythm and wait for sales, resetting the perceived "real" price to the discounted one. Occasional, clearly-reasoned promotions (seasonal, clearance) preserve pricing power far better than an always-on 20% code.
Related calculators
- Profit Margin Calculator
- Markup Calculator
- Selling Price Calculator
- Break-even ROAS Calculator
- All calculators
Part of the Pricing & Margins collection.