Discount Margin Impact
See how a discount eats into your profit margin.
MARGIN AFTER DISCOUNT
29.4%
40.0%
Margin before
10.6 pts
Margin lost
A discount comes straight out of profit — so its margin hit is larger than the discount itself.
What is Discount Margin Impact?
Discounts cut straight from your margin, not your cost. This tool shows how much profit a given discount gives up — and how much extra volume you'd need to break even.
Discounted margin = (price × (1 − discount) − cost) ÷ (price × (1 − discount))
How to read your result
- A discount comes entirely out of profit, so its margin hit is amplified.
- Low-margin products can't absorb big discounts.
- To break even on a discount you need meaningfully more volume.
- Compare margin before vs after before running a promotion.
Frequently asked questions
Why does a small discount hurt margin so much?
Because the discount comes entirely out of profit. On a 30% margin, a 10% discount wipes out a third of your profit on each sale.