Discount Break-Even Calculator

See how many more units you need to sell before a discount actually makes you money.

Your numbers

▾

Normal selling price

Product cost per unit

What you pay for the item (COGS).

Other costs per unit

Packaging, pick and pack, payment fees. Leave shipping out if the customer pays it.

Discount you're planning

Units you sell now (per period)

units

Your result · updates as you type

Extra sales needed to break even

+61.5%

Sell 808 units instead of 500 to make the same $10,500 gross profit at 20% off.

Margin per unit now: $21.00 (52.5%)
Margin per unit on sale: $13.00 (40.6%)
Profit if sales don't change: -$4,000

That's a big jump in volume. Consider a smaller discount, a threshold offer (e.g. 20% off orders over a set amount) or a bundle instead.

Extra sales needed at each discount

5% off

+11%

10% off

+24%

15% off

+40%

20% off

+62%

25% off

+91%

30% off

+133%

40% off

+320%

Breakdown

Sale price: $32.00
Cost per unit (product + other): $19.00
Gross profit now: $10,500
Units needed on sale: 808

The discount break-even formula

A discount comes entirely out of your margin, not your price. That's why a modest-sounding 20% off can mean you need to sell 60% more just to stand still.

Extra sales needed = margin per unit before ÷ margin per unit after the discount − 1

Example

Price: $40.00
Product cost + other costs: $19.00
Margin per unit before: $21.00
Price at 20% off: $32.00
Margin per unit after: $13.00

21 ÷ 13 − 1 = 61.5% more units to earn the same gross profit.

Offers that protect your margin

If the lift you need looks unrealistic, these usually cost less than a straight discount:

Threshold discounts: 15% off orders over a set amount. Customers add items to qualify, which raises AOV.
Bundles: discount a set of products together. Use the bundle pricing calculator to find the deepest bundle discount that keeps your margin.
Free shipping over a threshold: often valued more than its cost. Test it with the free shipping threshold calculator.
Gift with purchase: a gift worth $15 at retail might cost you $3.

When a discount that doesn't break even is still worth it

Winning new customers who will buy again. If a customer's second and third orders are at full price, a loss on the first can be the cheapest acquisition you'll get.
Clearing old stock. Inventory that sits costs storage and ties up cash. Selling at a thin margin can beat holding it for another season.
Moving customers to a better product, for example discounting a subscription's first box.

Questions people ask

What's the deepest discount I can offer without losing money?

Your margin per unit divided by the price. With a $40 price and $21 margin, anything above 52.5% off sells at a loss on every unit, no matter the volume.

Should I include payment fees and shipping?

Include every cost that comes with each extra unit: payment fees, packaging, pick and pack. Leave shipping out if the customer pays it. Payment fees fall slightly with a lower price, so this calculator is a little conservative.

Is a percentage or fixed-amount discount better?

The math is the same: what matters is how much the discount takes off each unit. Fixed amounts (e.g. $10 off $60) often feel bigger on cheaper items; percentages feel bigger on expensive ones.

Does this work for Black Friday?

Yes. Enter your normal weekly or monthly unit sales and the planned discount to see the volume you need across the promotion. Remember that some sales are pulled forward from the following weeks.

Last reviewed 29 September 2026.