How much more do I have to sell to afford this discount?
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Every discount is paid out of it, so it sets the whole answer.
What is left of the full price after the cost of the goods. Take out payment fees and shipping you absorb too for a stricter answer.
Enter your gross margin at full price. A discount is paid entirely out of it, so there is nothing to measure until it is here.
- Gross margin, as a percentage from 1 to 99Needed
- The discount, as a percentage offNeeded
- Orders a month and average order valueOptional
No benchmark is used. The affordable, tight and steep bands are this page’s own rule on the margin you enter, not an industry figure. Not sure of your margin? Work it out from cost and price.
The currency is a label: your figures are read in the currency you choose and nothing is converted. Nothing you type is sent anywhere — there is no account, no install and no store connection.
Margin kept, volume needed and the bands
A discount comes off the price but all of it comes out of your gross margin, so a store with a 60 percent margin that runs 20 percent off needs 50 percent more orders of the same basket just to keep the same gross profit.
No benchmark and no redemption rate is used — the answer comes entirely from the margin and discount you enter. If you only know your cost and price, the markup calculator turns them into a gross margin.
Four ideas carry the whole page. The bands are this page’s own rule of thumb on your margin, not an industry figure.
- Gross margin
- The share of the full price left after the cost of the goods. Take out payment processing and shipping you absorb too if you want the answer in contribution terms rather than gross.
- Margin kept
- The points of margin still on the order after the discount comes off the full price. A 20 percent code on a 60 percent margin keeps 40 points, which is 50 percent of the lower price the shopper actually pays.
- Extra sales needed
- How many more orders of the same basket you need, compared with selling at full price, to finish with the same gross profit. It assumes every discounted order would not have happened without the discount, which is the generous case.
- The bands
- This page’s rule of thumb on your own numbers. Affordable when the discount takes a third of your margin or less, tight up to two thirds, steep beyond that. A discount that takes exactly all of it earns nothing on every order, and one that takes more loses money on every order.
Nudgesmart is available on the Shopify App Store. Browse the template library or see what it costs.
The same discount against eight different margins
Illustrative arithmetic, not customer data. Every row comes from the same function the calculator above runs.
| Scenario | Gross margin | Discount | Margin kept | Extra sales needed | Verdict |
|---|---|---|---|---|---|
| Jewellery, 10% welcome code | 55% | 10% | 45 points | +22.2% | Affordable |
| Beauty, 15% first-order code | 70% | 15% | 55 points | +27.3% | Affordable |
| Apparel, 20% off sitewide | 60% | 20% | 40 points | +50% | Affordable |
| Specialty food, 15% bundle code | 35% | 15% | 20 points | +75% | Tight |
| Home goods, 25% seasonal sale | 45% | 25% | 20 points | +125% | Tight |
| Electronics accessories, 20% flash sale | 25% | 20% | 5 points | +400% | Steep |
| Supplements, half-price promotion | 50% | 50% | 0 points | Never | Earns nothing on every order |
| Consumer electronics, 30% clearance | 20% | 30% | −10 points | Never | Loses money on every order |
What the extra-sales figure leaves out
Full-price shoppers take the discount too
The extra-sales figure treats every discounted order as new. In practice some of those shoppers would have bought anyway, and each of them turns full-price gross profit into discounted gross profit, so the real volume needed is higher than the number shown.
It is gross profit, not contribution
Payment processing, shipping you absorb and returns come out of every order whether it is discounted or not. Enter a margin with those taken out if you want the answer to mean what reaches the bank.
Discounts train shoppers to wait
A code that runs often becomes the price. The arithmetic here covers one promotion; it cannot see the full-price orders that stop happening because shoppers have learned the next sale is coming.
A bigger basket changes the answer
Everything here assumes the discounted basket is the same size as a full-price one. An offer tied to a minimum spend or a bundle can raise the order value enough to change the verdict, which is why a threshold or a bundle is often the better shape.
Discount and profit questions
How much more do I need to sell to cover a discount?
It depends only on your gross margin and the size of the discount. At a 60 percent margin, 20 percent off needs 50 percent more orders to keep the same gross profit; at a 45 percent margin, 25 percent off needs 125 percent more; at a 25 percent margin, 20 percent off needs five times the orders.
Why does a small discount need so many extra sales?
Because the discount is taken from the price but paid entirely from the margin. A 20 percent code on a 25 percent margin does not cost a fifth of your profit, it costs four fifths of it, and the remaining sliver has to be made up by volume.
What if my discount is bigger than my margin?
Then every discounted order loses money on gross profit before any fee or shipping, and more volume only makes the loss larger. The calculator reports it as never paying back. The only ways out are a smaller offer, a cheaper incentive such as a gift at cost, or selling something with more margin in the basket.
Is free shipping cheaper than a percentage discount?
Often, because it costs you a fixed amount per order rather than a share of the basket, and a threshold means it only goes to baskets above a size you choose. Whether it is cheaper for you depends on your real shipping cost, which the free shipping threshold tool works through.
Why suggest a spin wheel or scratch card?
A game lets you choose every prize and its odds, so the headline prize can be generous while the average giveaway per play stays inside a budget you set. A flat code gives every shopper the same cost; a game spreads it.
Does this tool need my store, an account or an install?
No. It runs in the page, takes figures you already have, and sends nothing about your store anywhere.
The cheapest discount is the one fewer shoppers see.
Nudgesmart puts the offer inside a targeted popup, spin wheel or scratch card, and reports each code as displayed, copied and redeemed.
