“I’ll knock 10% off if you can start Monday.”
It takes four seconds to say. Whether it costs you 10% of your profit or half your next month’s work depends on your margin.
Put your own margin and discount into the calculator below. Most owners are surprised by the number.
The real cost of discounting
A discount comes straight out of your margin, not your price. This shows how many more sales you need just to make the same gross profit you made before the discount.
| Per $100 sale | Before | After |
|---|---|---|
| Price | $100 | $90 |
| Direct costs | $70 | $70 |
| Gross profit | $30 | $20 |
| Sales for same profit | 100 | 150 |
Extra sales needed, by discount and margin
Read across from your discount to your margin. Click any cell to load it into the calculator.
Formula: extra sales needed = discount ÷ (gross margin − discount). It assumes direct costs per sale stay the same and that you want to keep total gross profit where it was.
When the discount equals or exceeds the margin, each sale makes nothing or loses money, so no amount of extra volume covers it.
It ignores fixed costs, which stay the same either way, and any extra cost of delivering more sales (staff, capacity, overtime), which makes the real number higher.
