See exactly how much profit a discount destroys — and how many extra sales it would need to make up for it.
A 10% discount feels small. On a 40% gross margin, it cuts profit by 25%. On a 25% margin, it cuts profit by 40%. The lower your margin, the more brutal a discount is to the bottom line — and most owners discount way too readily because the percentage feels small.
The Discount Damage Simulator runs the maths: given your current margin, it tells you exactly what a given discount does to profit per sale AND how many additional sales the discount would have to drive to leave you in the same position as before.
Profit per sale after discount = price × (1 − discount) − cost. The damage as a percentage = (old profit − new profit) ÷ old profit. The break-even extra-volume needed = (1 ÷ new contribution ratio) − 1, expressed as a percentage increase in sales.
Enter your normal selling price
Enter your direct cost per sale (materials, payment fee, etc.)
Enter the discount you're considering, as a percentage
Read the per-sale profit hit, the percentage damage to profit, and the extra volume needed
Decide if the discount is worth it — or whether to add value instead
No, but they're rarely free. They make sense when (a) you're clearing inventory that's losing value daily, (b) you're acquiring a customer whose lifetime value far exceeds the lost margin, or (c) the alternative is no sale at all. They don't make sense as a default response to slow weeks.
If your profit per sale drops by 25%, you need 33% more sales to compensate (because each remaining sale earns less, the gap compounds). The exact figure depends on the discount and your original margin.
The same maths applies: any cost you absorb shrinks your margin. Free shipping that adds €5 to your cost is equivalent to a price cut of €5 on the customer's perceived value.
It's included in Founding Lifetime Access (€99 one-time). The free tier covers the Business Health Score, Profit Margin Calculator, and Break-Even Calculator.
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