Discount profitability
Calculator.
We compare full-price and discounted contribution with separate ad budgets.
Your assumptions
Illustrative defaults only, never Further or client figures. Currency is AUD, excluding GST. Enter 20 for 20%. Optional fields can stay blank or zero. Your inputs stay on this page.
Scenario result
Contribution change from discount
A$0.00
- Discounted unit price
- A$80.00
- Full-price contribution after ads
- A$6,000.00
- Discounted contribution after ads
- A$6,000.00
- Units to match full-price contribution
- 150
The discount adds A$0 in contribution at A$80.00, so the extra volume more than covers the margin given up. Worth checking it isn't just pulling forward orders you'd have had anyway at full price.
The maths
Full-price contribution = (100 - (30 + 10)) × 100 - 0 = 6,000 AUD.
Discounted price = 100 × (1 - 20%) = 80 AUD. Discounted contribution = (80 - 40) × 150 - 0 = 6,000 AUD.
Matching units = ceil(max(0, 6,000 + 0) / 40). The baseline contribution already deducts baseline ad spend.
Before you use it
Assumes the same unit variable costs in both scenarios. Include shipping, processing and returns in the variable-cost inputs where relevant. Sales shifted from other periods and fixed overheads are excluded.
This is a planning scenario, not a forecast or financial advice. Compare it with your actual order and customer records before changing spend.
Questions worth asking
What does the matching unit count mean?
It's the whole-number discounted units needed to match baseline contribution after baseline ads, while paying the discounted scenario's separate ad spend. A negative target requires zero units.
What if the discount leaves no unit contribution?
Matching units show N/A. If each extra unit contributes zero or a loss before ads, selling more units won't recover a positive contribution target.
Keep working through the numbers
Put the numbers to work.
We can look at the assumptions with you and decide what to test next.