Discount impact calculator
A discount comes straight off the margin, so a small price cut can need an enormous volume increase to pay for itself.
%
Extra volume needed
33.33%
- Units needed to hold profit
- 1333
- Margin after the discount
- 30.00
- Margin before
- 40.00
- Margin lost
- 25.00 %
- Profit if volume does not move
- 30 000.00
- Discounted price
- 90.00
Show the working
- Current price = 100
- Unit cost = 60
- Discount = 10
- Current units sold = 1000
- Margin before = 100 - 60 = 40
- Discounted price = 100 * (1 - 10/100) = 90
- Margin after the discount = 90 - 60 = 30
- profit_now = 40 * 1000 = 40 000
- Units needed to hold profit = 30 > 0 ? 40 000 / 30 : 0 = 1333.33
- Extra volume needed = 1000 > 0 ? (1333.33 - 1000)/1000*100 : 0 = 33.3333
- Margin lost = 40 > 0 ? (1 - 30/40)*100 : 0 = 25
- Profit if volume does not move = 30 * 1000 = 30 000
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- units needed = original profit / new unit margin
At a 40% margin, a 10% discount needs 33% more volume just to stand still.