Discount break-even calculator
Will a discount pay for itself? Enter your order value, cost and discount to see how many more orders you need to make the same profit.See how many more orders it needs.
Your break-even
At 10% off, you need 19% more orders to make the same profit.
That’s 120 orders instead of 100.
Profit per order
At full price: $30; after the discount: $25.20
- Profit per order now
- $48 order value − $18 cost = $30
- Discount
- 10% × $48 = $4.80
- Profit per order after
- $30 − $4.80 = $25.20
- More orders needed
- $30 ÷ $25.20 = 1.19, so 19% more
- In orders
- 100 × $30 = $3,000. 119 orders make $2,998.80, so you need 120.
This shows the break-even. It can’t tell you how many more people will buy — test that with a small group first.
Compare other discounts
Same $48 order value and $18 cost. Orders are what you’d need to match 100 full-price orders.
| Discount | Profit per order | More orders needed |
|---|---|---|
| 5%$2.40 off | $27.60 | 8.7%109 orders |
| 10% Yours$4.80 off | $25.20 | 19%120 orders |
| 15%$7.20 off | $22.80 | 32%132 orders |
| 20%$9.60 off | $20.40 | 47%148 orders |
| 25%$12 off | $18 | 67%167 orders |
| 30%$14.40 off | $15.60 | 92%193 orders |
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How the math works ↓The discount break-even formula
Your costs don’t drop when the price does, so the whole discount comes out of what you keep. Say you sell a $48 face wash. Each order costs you $18 for the product, packing and payment fees. The shopper also pays $6 for shipping, which covers what you pay to send it. At full price you keep $30. At 10% off the shopper pays $43.20 for the face wash, but your costs stay the same, so you keep $25.20. The whole $4.80 came out of your $30.
$30 ÷ $25.20 = 1.19 discounted orders to earn what one full-price order did: 19% more orders, not 10%.
A shortcut gives the same answer: divide the discount by what you keep after it. $4.80 ÷ $25.20 = 19%.
Your margin sets the hurdle
The less you keep per order, the harder the same discount bites. Keep the $48 order value and 10% off, but say your costs are $36. You keep $12 at full price and $7.20 after the discount, so you need 67% more orders. At 20% off you’d keep $2.40 and need 400% more: five times the orders. A code that looks small on the price tag can be most of your margin.
When a discount can make sense
- Someone asked for it. A shopper who requested a code, or joined your list for a promised offer, gets one discount on one order. It isn’t handed to everyone who would have paid full price.
- Clearing stock. If an item won’t sell at full price, full-price profit is the wrong comparison. Compare the discounted price with what the stock is worth to you if it stays on the shelf.
- Winning back a past buyer. If someone was unlikely to order again, less of the discount goes on a sale you’d have made anyway. See how to protect your margin before adding a win-back offer.
When it just gives margin away
Shoppers who were going to buy anyway still use the code, so each of their orders keeps $4.80 less. That is what the break-even pays for: 100 full-price orders would have kept $480 more, and the 20 extra orders are there to earn it back. So check whether a first cart reminder works without a code before making one standard, and count extra orders, not all orders, when you judge the result.
Test it before you roll it out
This calculator can’t tell you how many more people will buy. Your shoppers can. Send the offer to part of your list and hold back a similar group that gets the same email without the code. After the same number of days, compare profit per person in each group (orders × profit per order ÷ people in the group), not just orders. If the discount group’s profit per person is higher, the discount paid for itself. Not sure which email should carry the offer? Start with which email to send.
This calculator holds your cost per order fixed. Payment fees are often a share of what the shopper pays, so they fall a little with a discount and the real hurdle is slightly lower than shown.
Discount break-even questions
Try your own numbers ↑How do I calculate break-even for a discount?
Take your profit per order at full price (order value − cost), then subtract the discount to get your profit per discounted order. Divide the first by the second and subtract 1. With a $48 order value, $18 cost and 10% off: $30 ÷ $25.20 − 1 = 0.19, so you need 19% more orders. For whole orders, divide the profit you make now by the discounted profit per order and round up: 100 orders make $3,000, and $3,000 ÷ $25.20 = 119.05, so you need 120.
Is free shipping cheaper than a percentage discount?
Compare what each one takes from an order. Free shipping takes the shipping shoppers pay you now; a percentage takes that share of the order value. $6 of shipping is 10% of a $60 order, so on orders under $60 free shipping costs you more than 10% off, and on bigger orders it costs less. On the $48 example, 10% off leaves $25.20 and needs 19% more orders; free shipping leaves $24 and needs 25% more. For a free-shipping minimum, enter a qualifying order’s value and its cost. Choose “Free shipping” above to see it next to common percentages.
Why does 10% off need more than 10% more orders?
Your costs don’t drop when the price does, so the whole discount comes out of what you keep. $4.80 is 10% of the $48 order value but 16% of the $30 you keep. Each order now keeps $25.20, and $30 ÷ $25.20 = 1.19, so you need 19% more orders. The smaller your margin, the wider the gap.
How much discount can I afford?
At most your profit per order: $30 in the example, which is 62.5% of the $48 order value. At that point each order makes $0. The table above shows how fast the orders you need grow before that.
What should I count as my cost per order?
What you pay to fill one order: the product, packing and payment fees. Add shipping only if it costs you more than shoppers pay for it, and then only the difference. Leave out tax. Monthly costs such as apps aren’t per-order costs, so leave them out here.