Discount Profit Impact Calculator
See how much contribution profit a discount gives up, then calculate the extra sales volume required to get back to the same profit.
Enter the current sale economics
Model the full economics of a discount
Sales increase required at each discount level
| Discount | Sale price | Contribution / sale | Contribution margin | Required sales | Sales increase | Signal |
|---|
Profit at different sales lifts
| Sales lift | Monthly sales | Revenue | Contribution | Operating profit | Profit change vs current |
|---|
How far can price fall?
Contribution margin before fixed overhead at the current selling price.
Largest modeled discount that still preserves the entered minimum contribution margin.
Approximate discount where contribution per sale reaches zero.
A 10% discount can require far more than 10% additional sales.
Discounts come directly out of contribution profit while many variable costs stay unchanged. If a $100 sale carries $55 of variable cost, cutting price by $10 reduces contribution from $45 to $35. That is a 22.2% drop in contribution per sale even though the customer discount is only 10%.
The volume increase required depends on contribution margin, not just the discount percentage. Low-margin products and services generally need much larger sales increases to recover a given discount.