Discount impact calculator.
Enter price, cost, and your discount %. See your new margin and exactly how many MORE units you have to sell to recover the lost profit.
Your numbers
Per item. Defaults assume a €40 retail item with €18 COGS and a 20% off promo.
New margin per unit
How this calculator works (the same math nouz uses)
A discount looks small because it's framed as a slice off the price — but your profit is price minus cost, and the cost doesn't move. So the whole discount comes out of your margin, not your revenue. This calculator shows your margin after the markdown, the profit you give up per unit, and the one number that makes owners think twice: how many more units you'd have to sell just to end up where you started. Because a discount attacks a smaller number (margin) than the one it's quoted against (price), that "extra units" figure is almost always bigger than the discount itself.
New margin = (price × (1 − discount %)) − costMargin lost per unit = old margin − new marginExtra units to match % = (old margin ÷ new margin) − 1
A worked example
Take the defaults: a €40 item costing €18, marked down 20%. Old margin is 40 − 18 = €22. The discounted price is 40 × 0.80 = €32, so the new margin is 32 − 18 = €14 — you've lost €8 of profit on every unit. Now the reality check: to make the same total profit at €14 instead of €22, you need (22 ÷ 14) − 1 = 57.1% more units sold. A 20% headline discount forces you to sell over half again as many units just to break even on profit. That's the trap: the discount sounds like a fifth off, but it demands you nearly double-and-a-half your sales effort to stand still.
What a healthy number looks like
There's no "good" discount ratio in the abstract — the test is whether the promo will realistically lift volume by more than the extra-units figure. If a markdown needs 57% more units and your best campaigns have never lifted traffic by half, the math says you'll end up poorer. As a rough guide: the thinner your margin, the more brutal the extra-units number, and once the discounted price drops below your cost the margin goes negative and no volume can save you. Deep discounts only pay when they clear stock you'd otherwise write off entirely, or win a customer whose future value dwarfs the one-time hit.
Common mistakes
- Reading a 20% discount as a 20% profit hit. It's a 36% margin hit here, and it takes 57% more units to recover — always check the real numbers.
- Discounting without knowing the break-even volume. Put the extra-units figure in front of the team before any promo, not after.
- Assuming promos create new demand. Most pull forward sales you'd have made anyway — often from your highest-margin, most loyal customers.
- Stacking discounts near cost. Once the markdown pushes price below cost you lose money on every unit, and selling more makes it worse, not better.
When to use it — and what's next
Run this before any sale, loyalty offer, or "just this once" markdown a customer talks you into. It reframes discounting from a gut feeling into a volume target you can judge honestly. Use it alongside the price increase impact calculator to see the striking asymmetry: a price rise lets you lose some volume, while a discount demands you find much more. Then track whether the promo actually delivered that extra volume in a daily profit and loss template instead of trusting a busy-looking day. Nouz shows the profit effect of every promo the same day it runs, so you learn which discounts pay and which just made you busy.
Common questions
Why does a 20% discount cost much more than 20% of my profit?
Because the discount comes out of your margin, not your revenue, and the cost of the item does not budge. On the €40 item with €18 cost, a 20% discount cuts margin from €22 to €14, which is a 36% margin hit for a 20% headline discount.
What is the extra-units-to-match number and why does it matter?
It is how many more units you must sell at the discounted price to make the same total profit, calculated as (old margin divided by new margin) minus 1. On the defaults that is 57.1%. It is the number to put in front of your team before any promo, because if you cannot realistically lift volume that much, the discount leaves you poorer.
Why does a discount always need more extra units than the discount percentage?
Because the discount is quoted against price but subtracted from margin, which is a smaller number. Taking a fixed amount off a smaller base is a larger proportional cut, so the volume you must recover always exceeds the headline discount, often by a wide margin on lower-margin items.
What happens if the discount pushes my price below cost?
Your margin goes negative and you lose money on every unit sold. In that case no amount of extra volume rescues the promo, because selling more simply multiplies the loss. Always check that the discounted price still sits comfortably above your cost per unit before running the offer.
When do discounts actually make sense?
When they clear seasonal stock you would otherwise write off, acquire a customer whose lifetime value clearly beats the discount cost, introduce a new product, or bundle to move slow inventory. They do not make sense as a routine, a brand position, or a way to compete on price with no margin advantage elsewhere.
Do promotions not just bring in more sales?
Usually less than owners hope. Most promos pull forward sales you would have made anyway, frequently from your most loyal, highest-margin customers. That is why the extra-units reality check matters: it tells you the true volume lift a promo must deliver before it earns back the margin you gave away.