Calculate How Much Your Sales Need to Increase to Maintain Profit
Free calculator to instantly see how much more volume you need to sell when offering discounts. Understand the real impact of promotions on your bottom line.
What this means: To maintain the same total profit when offering a 20% discount with 40% COGS, you need to sell 50.0% more units. Your margin per unit drops from 60.0% to 40.0%, so higher volume is required to compensate.
Your original profit margin = 100% - COGS%. For example, if your COGS is 40%, your margin is 60%.
When you offer a discount, your new selling price = 100% - Discount%. Your new margin = New Price - COGS. A 20% discount on an item with 40% COGS means you sell at 80% price, leaving 40% margin.
To maintain the same total profit with lower per-unit margin, calculate: (Original Margin ÷ New Margin - 1) × 100. With 60% original margin and 40% new margin, you need (60÷40-1) × 100 = 50% more sales.
Use this data to decide if the discount makes sense. Can you realistically achieve the required volume increase? Will the discount drive enough new customers or larger orders to hit the target?
Discounts can feel like "free" marketing, but they directly cut into your bottom line. A 20% discount doesn't mean 20% less profit - it often means 40-50% less profit per sale. Understanding the math prevents costly mistakes.
Before running a promotion, know exactly how much more you need to sell. If you need a 67% sales increase to break even on a 25% discount, is that realistic based on past campaigns? This calculator gives you data-driven targets.
Not all discounts are created equal. A 10% discount with 30% COGS requires 14% more volume. A 30% discount requires 75% more volume. Test different discount levels to find the sweet spot for your business.
When you discount to acquire new customers, factor in the margin erosion. If you spend $50 on ads to get a sale with a 20% discount, your effective CAC is higher than you think. This tool reveals the hidden costs.
Before launching Black Friday, flash sales, or clearance events, calculate how much volume you need to hit. If historical data shows you can achieve a 40% lift during BFCM, you know you can profitably offer up to a certain discount level.
When planning promotional email campaigns, test different discount levels. Should you offer 15% off or 25% off? This calculator shows you that a 15% discount might require 21% more sales while 25% requires 50% more sales - helping you pick the right offer.
When offering volume discounts or wholesale pricing, ensure the lower margin is offset by higher order quantities. Calculate the minimum order size needed to maintain profitability at each discount tier.
Before giving influencers 20% discount codes, calculate if their audience size and conversion rate can drive enough volume. If an influencer has 10K followers with 2% conversion, that's 200 sales - is that enough to justify the margin loss?
When creating winback campaigns for lapsed customers, balance discount depth with expected response rate. A deeper discount may not be necessary if a smaller offer achieves the same reactivation rate.
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This calculator is just the beginning. BS&Co. helps ecommerce brands build profitable email marketing strategies that drive revenue without eroding margins.