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Discount Profitability Calculator: Break Even on a Sale
Enter your price, unit cost and planned discount. The calculator shows how far profit per unit falls and how many extra units the sale has to move just to match full-price profit.
Extra units you must sell
+50%
Profit per unit falls from $30.00 to $20.00, so you need 1.50× the volume for the same total profit.
Margin during the sale
50.0%
Down from 60.0% at full price. A discount comes straight out of profit, not revenue — that's why small discounts need surprisingly large volume lifts.
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Why small discounts need big lifts
A discount comes out of profit, not revenue. At a $50 price and $20 cost, 20% off cuts profit per unit from $30 to $20 — so the sale needs 50% more volume to earn the same money. The thinner your margin, the more brutal this gets.
When a losing discount still makes sense
Clearing stock that would otherwise be dead, acquiring first-time customers you expect to repeat, or hitting a cash deadline can justify a sale that loses on this math. The point of the calculator is to make that a decision, not a surprise.
Full walkthrough: What is sell-through rate? Formula and example.
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Frequently asked questions
How do I know if a discount is profitable?
Compare total profit, not revenue. Work out profit per unit at the sale price, estimate the extra volume the sale will bring, and check whether (sale profit × sale volume) beats (full profit × normal volume). This calculator gives you the volume lift needed to break even — if you don't believe the sale will clear it, don't run it.
How much extra volume does a 20% discount need?
It depends on your margin. With a 60% margin, 20% off needs 50% more units for the same profit. With a 40% margin, it needs 100% more — double the volume. That's why the same promotion can be smart for one store and ruinous for another.
Is it better to discount or offer free shipping?
Run both through the same math: free shipping is a fixed-dollar discount roughly equal to your shipping cost, which usually costs less than a percentage off on bigger orders. It also avoids visibly cutting the product's price, which protects your price integrity over time.
Do frequent sales hurt a Shopify store?
They can. Shoppers learn your rhythm and wait for the next sale, which shifts full-price buyers into discounted buyers — volume without profit. Occasional, clearly-reasoned sales (seasonal clearance, bundles, end-of-line) keep the signal that your everyday price is the real price.