See how much extra volume a discount must generate simply to hold gross profit flat.
A discount comes entirely out of contribution, not revenue, so a 20% discount on a 55% margin removes over a third of the profit per unit. Holding profit flat then requires a far larger volume increase than the discount itself. The required volume uplift is almost always larger than anyone expects, which is why discounting is the fastest way to grow revenue and shrink profit at the same time.
Discount Impact
Units needed = original gross profit ÷ contribution per unit after the discount
Units needed = original gross profit ÷ contribution per unit after the discount A discount comes entirely out of contribution, not revenue, so a 20% discount on a 55% margin removes over a third of the profit per unit. Holding profit flat then requires a far larger volume increase than the discount itself.
The required volume uplift is almost always larger than anyone expects, which is why discounting is the fastest way to grow revenue and shrink profit at the same time.
This calculator takes 4 inputs: Full price per unit, Cost per unit, Discount offered, Units sold at full price. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.