Discount Margin Calculator
See what a discount does to your profit: discounted price, profit after the discount and the margin that survives it.
How it works
Sale price = price × (1 − discount%) · Profit = sale price − cost · Margin % = profit ÷ sale price × 100
A discount comes straight off the price, so it comes straight off profit — the cost does not move. Because the price shrinks while the cost stays put, the remaining margin falls faster than the headline discount suggests. Once the discounted price dips below cost, the margin turns negative and every sale loses money, which this calculator flags.
Worked example
A $100 item at 20% off sells for $80. With a $60 unit cost, profit falls to $20 and the remaining margin is 20 ÷ 80 = 25% — down from the 40% margin before the discount.
Frequently asked questions
How deep a discount can I afford?
Only down to your cost. Once the discounted price drops below cost, every sale loses money. This calculator flags when the remaining margin turns negative.
Why does a discount hurt margin so much?
Discounts come off profit, not cost. On a 25% margin, a 10% discount can wipe out roughly 40% of your profit, because the price falls while the cost stays fixed.
Should I discount or hold price?
Discounting works when the extra volume more than makes up for the thinner per-unit profit. If it does not, holding price — or adding value instead — usually protects total profit better.
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Educational estimate, not financial advice.