Percentage Discount Break-Even Calculator: Know Your Numbers Before You Discount
Find out if your percentage discount will actually make money. Enter your margin and discount rate to see how many extra sales you need to break even on your % off promotion.
Muhammed Tüfekyapan
Key Takeaways
- 1 A 20% discount on 40% margins doesn't cost 20%—it costs 50% of your profit
- 2 Use the break-even formula: Discount % ÷ (Margin % − Discount %) = Required sales increase
- 3 If your discount equals or exceeds your margin, you lose money on every sale
- 4 Blanket discounts waste margin on customers who would pay full price anyway
- 5 Target discounts only to hesitant visitors to protect your margins
Here's a question that will change how you think about discounts forever:
If you offer a 20% percentage discount, how many more units do you need to sell just to make the same profit?
Most merchants guess wrong. Way wrong.
The answer depends on your profit margin. And that's exactly what this calculator shows you.
Enter your numbers below. See the truth. Then decide if that discount is really worth it.
Break-Even Calculator
Find out how many extra sales you need to justify your discount
Common ranges: Fashion 40-60%, Electronics 15-30%, Beauty 60-80%
Try different values to see how they affect your break-even
To break even, you need to sell
+100%
more units than you normally would
Profit Lost Per Sale
-50%
New Margin After Discount
20%
If You Sell 100 Units Normally...
Need 200
Warning: Impossible Break-Even
Your discount equals or exceeds your margin. You will lose money on every sale, no matter how many you make.
Achievable Break-Even
This discount can work, but only if you can increase your sales volume significantly.
How Percentage Discount Math Works
Let's make this simple.
Say you sell a product for $100. Your cost is $60. That means you keep $40 profit. Your gross margin is 40%.
Now you offer 20% off. The customer pays $80 instead of $100.
But wait. Your cost is still $60. So now your profit is only $20.
Your percentage discount didn't cost you 20% of your profit. It cost you 50% of your profit.
That's the trap. Discounts come out of your margin, not your revenue.
The Break-Even Formula:
Required Sales Increase = Discount % ÷ (Margin % − Discount %)
Using our example:
- Discount: 20%
- Margin: 40%
- Break-even: 20% ÷ (40% − 20%) = 20% ÷ 20% = 100% more sales needed
You need to double your sales just to make the same profit. Not more profit. The same profit.
What Percentage Discounts Mean For Your Store
The "Traffic Question"
Before you run any discount, ask yourself: Can I really double my traffic?
If you normally sell 50 units a week, can you sell 100? If not, you're losing money on that 20% off sale.
Most stores can't double their traffic overnight. So most "20% off" sales actually hurt profits.
The Dedicated Buyer Problem
Here's something the calculator doesn't show: not everyone who uses your discount needed it.
Some visitors were going to buy anyway. At full price. They didn't need convincing.
But you showed them a discount popup. They used it. You just gave away margin for nothing.
This is called the "Dedicated Buyer Problem." Blanket discounts subsidize people who would have paid full price.
The real question isn't "how much discount?"
It's
"who should see the discount?"
Percentage Discount Break-Even Reference Table
Here's a quick reference. Find your margin on the left. See how many more sales you need for each discount level.
| Your Margin | 10% Off | 15% Off | 20% Off | 25% Off | 30% Off |
|---|---|---|---|---|---|
| 30% Margin | +50% | +100% | +200% | +500% | Impossible |
| 40% Margin | +33% | +60% | +100% | +167% | +300% |
| 50% Margin | +25% | +43% | +67% | +100% | +150% |
| 60% Margin | +20% | +33% | +50% | +71% | +100% |
| 70% Margin | +17% | +27% | +40% | +56% | +75% |
Color guide: Green = Achievable for most stores. Amber = Challenging. Red = Very difficult or impossible.
Deep Dive: The Ultimate Guide to Percentage Off Discounts
Stop guessing. Learn the psychology, the hidden math, and the exact strategies to use discounts profitably without destroying your margins.
A Smarter Approach: Show Discounts Only to Those Who Need Them
The break-even math assumes every discounted sale is a new sale. A sale that wouldn't have happened otherwise.
But blanket discounts don't work that way.
When you show a popup to everyone, you're also showing it to people who were ready to buy. You're giving away margin to customers who didn't need a nudge.
The smarter approach:
- Watch visitor behavior. Some people are browsing. Some are buying. The difference is visible in how they act.
- Identify hesitant visitors. Long time on page. Mouse moving to close tab. Cart sitting idle. These are signs someone needs a push.
- Show offers only to them. The convinced buyer pays full price. The hesitant visitor gets the nudge they need.
This is called intent-based discounting. It protects your margins while still capturing sales you would have lost.
9 Best Shopify Discount Apps: Find the Right One for YOUR Problem
Stop browsing feature lists. 9 premium apps compared by the 7 problems they solve—not rankings, not reviews, just honest "use this when..." guidance. Find your perfect match in minutes.
What if every discount went to the right person?
Growth Suite predicts purchase intent and shows time-limited offers only to visitors who need them.
In This Article
Muhammed Tüfekyapan
Founder of Growth Suite
Muhammed Tüfekyapan is a growth marketing expert and the founder of Growth Suite, an AI-powered Shopify app trusted by over 300 stores across 40+ countries. With a career in data-driven e-commerce optimization that began in 2012, he has established himself as a leading authority in the field.
Stop giving discounts to everyone.
Growth Suite watches each visitor, predicts purchase intent, and makes one real, time-limited offer—only to those who need it.
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