Free profit decision tool
See how much contribution profit each discounted sale gives up, how many additional sales are required to recover it, and whether your expected volume lift actually clears the hurdle.
Quick answer
If a $100 sale carries $60 of variable cost, contribution profit falls from $40 to $30 after a 10% discount. That is a 25% loss per sale, so volume must rise 33.3% just to preserve the same total contribution profit.
Discounted price = current price × (1 − discount percentage)
Required sales = current contribution profit ÷ discounted contribution per sale
Reviewed August 15, 2026
Step 1
This model assumes every compared sale receives the discount, variable cost per sale stays constant, and fixed costs do not change. It measures contribution toward fixed costs and profit—not net profit, cash flow, customer lifetime value, or promotion cannibalization.
Revenue is not the decision
A discount reduces revenue on every discounted sale while the variable cost of delivering that sale may barely move. The lost dollars come directly out of the amount available to cover fixed costs and profit.
That is why the required volume lift depends on contribution margin, not the discount percentage alone. Thin-margin offers can become uneconomic with even a modest discount.
Review the exact formulas →Do not approve the promotion yet
Include costs caused by one additional sale: direct labor, materials, packaging, fulfillment, payment fees, shipping, commissions, and similar costs. Use the cost expected at the discounted price and volume. Fixed rent and general overhead do not belong in this field.
The discount comes out of contribution profit, not cost. A $10 discount on a sale that previously contributed $40 removes 25% of contribution per sale. The remaining $30 must be earned across enough extra sales to replace the missing amount.
Yes. The business can process more orders and report higher revenue while keeping less money after variable costs. That combination adds workload without improving the amount available for fixed costs and profit.
Stop relying on volume. Each additional sale creates zero or negative contribution, so no finite sales increase can restore a previously positive result. Reduce the discount, lower variable cost, narrow eligibility, or redesign the offer.
The calculator does not estimate full-price sales cannibalized by the promotion, repeat purchase behavior, capacity limits, inventory constraints, service degradation, cash timing, tax, or customer acquisition value. Treat the result as the minimum economic hurdle—not proof the promotion is a good strategy.
