Every discount is a margin cut. This calculator shows exactly how much more you'd have to sell just to break even on the discount — usually a lot more than founders expect.
The % off you offer.
That's how many times your current unit volume you'd need to hit the same profit after the discount.
You'd need to sell 1.50x the volume — that's 50% more units — just to keep the same total profit. The discount may still be worth it for acquisition, but treat it as a marketing cost, not a 'win'.
Founders see a 20% off promo and assume they're sacrificing 20% of margin. That's wrong. The 20% comes off price, but your costs stay the same. If your margin was 60% before the discount, after a 20% cut it's only 50% — meaning you've lost a sixth of your profit per unit. The smaller your starting margin, the more devastating the discount becomes. At a 30% margin, a 20% discount cuts your profit by two-thirds.
To recover the lost profit, you need extra volume. The math is brutal: if your discount cuts profit per unit in half, you need to sell 2x as many units just to break even on total profit. Most discount-driven sales lift demand 20-40% in the discount window, not 100%+. So the math almost never works in your favor — unless the discount is a customer acquisition tool with downstream LTV.
Discounts work when (1) they bring in new customers with high LTV, (2) they clear deadstock that would otherwise be written off, (3) they upsell into a higher-margin product (BOGO, free gift over $X). Discounts almost never work as 'sales boosters' on existing high-margin SKUs to repeat buyers — that's straight margin erosion.
Many DTC brands run 25-40% off in BFCM windows and then wonder why Q4 cash flow is tight despite "record revenue". Revenue went up; margin per dollar went down sharply; and a chunk of those orders would have happened at full price anyway (true cannibalization). Always run the post-mortem on incremental units, not revenue.
Tier discounts to AOV ("15% off orders over $80") to lift basket size, not just unit count. Use bundle discounts that pull lower-margin SKUs along with star products. Run flash discounts to dormant cohorts only, not your entire list. And always model the volume math first with a tool like the one above — before sending the email.
Profit Tracker shows you the real margin impact of each discount in real time, across every campaign and SKU — so you stop running promos that don't pay for themselves.