What is the Discount Calculator?
A discount calculator for business measures both the customer-facing sale price and the hidden unit-economics impact of running a promotional markdown. While basic percentage-off tools only subtract a percentage from a sticker price, business owners, retail buyers, and ecommerce founders need to know how a discount affects profit per unit, gross margin percentage, and required sales volume.
This free price discount calculator features two dedicated modes: Discount impact on profit (which computes your sale price, dollar savings, profit and margin before and after the discount, and the exact extra sales needed to earn the same total profit) and Find discount % (which calculates the exact markdown percentage and amount saved from an original price and a sale price).
How to use the Discount Calculator
Follow these steps to evaluate a promotional markdown before launching a sale:
- Select Your Calculation Tab: Keep Discount impact on profit selected to analyze unit margins and required volume lift, or switch to Find discount % if you already have an original price and sale price.
- Enter Original Price & Discount (%): Input your regular full retail price and the percentage markdown you plan to offer.
- Enter Cost per Unit: Input your direct product Cost of Goods Sold (COGS) so the calculator can measure unit profit and margin before and after the discount.
- Add Optional Current Monthly Units: Enter your baseline monthly unit sales at full price to see the exact total units and extra units you must sell to earn the same monthly profit.
- Test Markdown Tiers & Download PDF: Drag the What-If discount slider (0% to 60%) and compare the 5%, 10%, 15%, 20%, 30%, and 40% discount table, then click Download Report to export an A4 PDF.
Discount Calculator formula
To calculate the sale price, margin compression, and extra sales needed after discount formula, use these equations:
For Tab (b) Find discount %: Discount (%) = ((Original Price − Sale Price) ÷ Original Price) × 100.
Worked example
Let's walk through a worked example using the exact default figures pre-loaded in the calculator above:
- Original price: $100
- Discount (%): 20%
- Cost per unit: $60
- Current units sold per month: 100 units
Although 20% off sounds like a modest promotion, it cuts your unit profit by 50% (from $40 down to $20). To earn the same $4,000 monthly profit that 100 full-price sales generated, you must sell 200 units—an extra 100 units (+100% volume lift).
Why it matters
Unplanned discounting is one of the fastest ways profitable businesses accidentally erase their net earnings. Running your numbers through a discount impact on profit model before launching a flash sale or approving a B2B sales concession ensures your marketing team knows the exact volume lift required to justify the markdown.
For deeper pricing and unit-economics analysis, combine this tool with our free product pricing calculator, convert between cost-plus markup and margin in the cost markup calculator, check your baseline retention in the gross profit margin calculator, or calculate how a price change shifts your monthly fixed-cost threshold in the break-even calculator.