Discount Impact on Profit Calculator
See how much extra volume a discount must generate just to keep the same total gross profit — the hidden cost of a sale.
How it works
Discounted profit = price × (1 − discount%) − cost · Extra volume % = (old profit ÷ new profit − 1) × 100
A discount comes straight out of profit, not revenue, so a modest price cut can gut a thin margin. This calculator shows the volume "hurdle" — how many more units you must move to end up with the same total gross profit as before the sale. When the hurdle is high, a discount only pays if it genuinely unlocks that much extra demand.
Worked example
An item priced at $100 with a $60 cost earns $40 profit. A 20% discount drops the price to $80 and profit to $20 — half of what it was. To keep the same total profit you must sell (40 ÷ 20 − 1) = 100% more units, i.e. double your volume.
Frequently asked questions
Why does a small discount hurt so much?
The discount comes entirely out of the profit margin, not the whole price. On a 40% margin, a 20% price cut removes half the profit, so you need far more volume to compensate — the thinner your margin, the steeper the hurdle.
How do I read the extra-volume number?
It is the percentage increase in unit sales required to match your pre-discount total gross profit. A result of 100% means you must double units sold; anything you sell beyond that is genuine upside.
Is discounting ever worth it?
Yes — to clear aging inventory, win a first purchase from a high-lifetime-value customer, or move fixed-cost capacity. Just weigh it against this volume hurdle rather than discounting by reflex.
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Educational estimate, not financial advice.