Promotion ROI Calculator

The Hidden Math: 10% Off Price ≠ 10% Less Profit

This is the single most important insight for e-commerce sellers: a 10% discount cuts your profit by much more than 10%. If your margin is 50%, a 10% price cut reduces your profit per unit by 20%.

At 30% margin, a 10% discount wipes out 33% of your profit. At 20% margin, it wipes out 50%. Low-margin businesses can be destroyed by discounts.

The Breakeven Volume Table

Extra sales volume needed to maintain the same total profit after discounting:

At 20% margin, a 10% discount requires doubling your sales volume just to break even. Most promotions don't achieve that.

When Discounts DO Make Sense

Clearing inventory: Dead stock has carrying costs. A discount that moves it frees up cash and warehouse space.

Customer acquisition: If customer lifetime value (LTV) is high, a first-purchase discount is an acquisition cost, not a profit loss.

Volume commitments: If the discount triggers bulk orders that reduce your per-unit cost, the math can work out.