Free tool

Profit Margin After Discount Calculator

See what each item leaves after a discount and the costs you enter.

Use this discount margin calculator before lowering a product’s price. Enter the regular price, discount, product cost, other costs per item and percentage fees. Compare the selling price, gross profit, gross margin and contribution before and after the discount.

Contribution is the amount left after all the costs you enter. When it is positive at both prices, the calculator shows how many more units you would need to sell to keep total contribution the same. Fixed overhead and any costs you leave out still need to be covered.

Per item · Same costs at both prices · Before fixed overhead

Price and discount

Use one item and one currency for the price and every cost.

Currency

Use one currency for every amount. This changes labels, not amounts.

Replace these examples with your own numbers. Results update as you type. Your entries stay on this page until you copy them.

Need help finding your figures in Shopify?

Ask Sidekick for the regular price and recorded costs for the same item. Check missing costs and fee rates against your records. Choose the proposed discount yourself.

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Regular selling price

Price per item before this discount, after ordinary refunds and excluding sales tax. Use the same item for all costs below. Zero is allowed, but gross margin at a zero price is undefined.

Discount

Percentage taken off the regular price, from 0% to 100%. For example, 20% takes a $100 price to $80. This percentage applies to the price; the effect on contribution is shown in your results.

Costs per item

Product cost per item

What one item costs you, including any freight or duty allocated to it. The calculator uses this same cost before and after the discount.

Other costs per item

Add fulfillment, packaging, shipping you pay, fixed payment fees and any acquisition cost allocated per item. Leave out product cost and the percentage fees below. This amount stays the same at both prices.

Fees as a percentage of price

Enter the combined fee rate charged on the selling price, such as payment or marketplace fees. The same rate applies before and after the discount. Put any fixed fee per item in Other costs per item instead.

Your calculationUSD

What the discount changes

Entered figures · Per item · Same costs at both prices · Before fixed overhead

Contribution after discount$27.6

Contribution after discount, per item$27.6

The amount left from the discounted price after product cost, other costs per item and percentage fees.

Before fixed overhead, financing, tax on profit and other costs left out.

Discounted selling price: $80
Gross margin after discount: 50%

Contribution before and after

Per item. Product cost, other costs per item and the fee rate stay the same.

Before discount$47

After discount$27.6

Both bars start at zero and use the same scale.

Extra units needed

Extra units needed: 70.3%
Total units needed, as a multiple: 1.7×

This is the increase needed at the discounted price to keep total contribution the same.

The calculator does not predict how many units you will sell. It assumes every compared unit sells at the discounted price, with the same costs per item.

All your results 12 measures

Per item. Money amounts use USD; percentages and volume multiples show their own units.
Measure	Result
Regular selling priceThe price you entered before this discount, after ordinary refunds and excluding sales tax.	$100
Discounted selling priceRegular price reduced by the discount percentage.	$80
Gross profit before discountRegular selling price minus product cost. Other costs per item and percentage fees have not yet been subtracted.	$60
Gross profit after discountDiscounted selling price minus product cost. Other costs per item and percentage fees have not yet been subtracted.	$40
Gross margin before discountGross profit before the discount divided by the regular selling price, shown as a percentage. Undefined when regular price is zero.	60%
Gross margin after discountGross profit after the discount divided by the discounted selling price, shown as a percentage. Undefined when discounted price is zero.	50%
Contribution before discountRegular price minus product cost, other costs per item and percentage fees. Fixed overhead and omitted costs still need to be covered.	$47
Contribution after discountDiscounted price minus product cost, other costs per item and percentage fees. Fixed overhead and omitted costs still need to be covered.	$27.6
Change in contribution per itemContribution after the discount minus contribution before it. A negative amount means less is left per item.	-$19.4
Total units needed, as a multipleContribution before divided by contribution after. A result of 1.7× means about 1.7 times as many units at the discounted price to keep total contribution the same. Shown only when both amounts are positive.	1.7×
Extra units neededThe extra percentage of units needed to keep total contribution the same: (required volume multiple − 1) × 100. This calculation does not predict extra sales.	70.3%
Decrease in contributionThe fall in contribution divided by contribution before the discount, shown as a percentage. Shown only when contribution before the discount is positive.	41.3%

Amounts are shown with at most one decimal. Copy results includes the unrounded values. Tiny non-zero amounts keep their sign; unavailable ratios are not shown as zero.

Calculation complete

This uses the price and costs you entered. Check your records, any missing costs and expected demand before lowering the price.

What this calculation assumes

Use amounts for one item in one currency. Regular selling price is before this discount, after ordinary refunds and excluding sales tax.
Product cost and other costs per item stay the same at both prices. The percentage fee rate stays the same, so the fee amount falls with the price.
Contribution is the amount left after the costs you enter. Fixed overhead, financing, tax on profit and other omitted costs still need to be covered.
Required sales volume is shown only when contribution is positive before and after the discount. It assumes every compared unit sells at the discounted price.
The volume comparison does not predict demand or measure a promotion’s outcome. It leaves out extra campaign costs and changes in customer acquisition, returns or buying behavior.
A zero selling price is valid, but gross margin at that price is undefined. Discounts can range from 0% to 100%.

Result review

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What’s different about this calculator

See how much more you would need to sell to cover a discount.

Basic calculation	What this adds
Selling price after a discount	Compares contribution before and after it, including per-item costs and percentage fees
Contribution from one discounted item	Calculates the extra units needed to keep total contribution unchanged
A target for extra unit sales	Warns when zero or negative contribution per discounted item makes recovery impossible

How this tool works

How to calculate margin after a discount

Reduce the regular selling price by the discount percentage. Subtract product cost from each price to find gross profit before and after the discount. Divide each gross profit amount by its own selling price, then multiply by 100 to get gross margin.
To find contribution, also subtract the other costs per item and the percentage fees. Product cost and other costs per item stay the same at both prices. The fee rate stays the same, but the fee amount falls with the selling price.
When contribution is positive before and after the discount, divide the before amount by the after amount to find the required total sales volume as a multiple. Subtract 1 and multiply by 100 to find the extra percentage of units needed. This assumes every compared unit sells at the discounted price, with the same entered costs. It does not predict demand or decide whether a promotion will pay off.

Discounted price = regular price × (1 − discount % ÷ 100). Gross profit = selling price − product cost. Gross margin (%) = gross profit ÷ selling price × 100. Contribution = selling price − product cost − other costs per item − (selling price × fee % ÷ 100). Required volume multiple = contribution before ÷ contribution after, when both are positive. Extra units (%) = (volume multiple − 1) × 100.

A 20% discount leaves $27.6 instead of $47

Start with a $100 price, $40 product cost, $10 other costs per item and a 3% fee. Before the discount, gross profit is $60 and gross margin is 60%. The $3 fee leaves $47 contribution. A 20% discount lowers the price to $80. Gross profit becomes $40 and gross margin becomes 50%. With the same $10 other costs and a $2.4 fee, contribution is $27.6. That is $19.4 less per item, a 41.3% decrease. To keep total contribution the same, you would need to sell about 1.7 times as many units, or 70.3% more, at the discounted price.

Questions & answers

Understanding your result

What is the difference between gross margin and contribution?

Gross profit is selling price minus product cost. Gross margin shows that amount as a percentage of selling price. Contribution also subtracts the other costs per item and percentage fees you enter. It shows the money left to cover fixed overhead and other costs that are not included. A positive gross margin can still leave a negative contribution.

Does a 20% discount reduce profit by 20%?

The discount percentage is a share of the selling price. The decrease in gross profit or contribution is measured against a smaller starting amount. In the example above, the price falls by 20%, but contribution falls from $47 to $27.6, a 41.3% decrease. Product cost and the other costs per item stay the same, while percentage fees fall with the price.

Can I use this as a retail markdown calculator?

Yes. Enter the price before the markdown, the markdown percentage and the costs for one item. The calculator shows the price and margin after the markdown. Use the same item and one currency throughout. If you have already reduced the price, make sure the discount percentage is measured from the regular price you enter.

How many extra units would I need to sell after a discount?

Divide contribution before the discount by contribution after it. For example, $47 divided by $27.6 is about 1.7. You would need 70.3% more units at the discounted price to match the original total contribution. This comparison only works when both contribution amounts are positive. It assumes unchanged costs per item and does not include extra campaign costs or estimate how many sales would have happened without the promotion.

What if contribution is zero or negative?

If contribution was positive before the discount but becomes zero or negative, selling more at that price cannot recover the original positive total contribution. If contribution was already zero or negative at the regular price, the calculator does not show a required volume result. Check the price and costs first. A negative amount means the entered costs exceed the selling price.

Can I enter a 0% or 100% discount?

Yes. A 0% discount keeps the price unchanged. A 100% discount makes the selling price zero. You can also enter a regular price of zero. Gross profit and contribution can still be calculated, but gross margin is undefined wherever the selling price is zero. The calculator shows an unavailable result for that margin rather than 0%.

Which costs should I include?

Enter product cost separately. Other costs per item can include fulfillment, packaging, shipping you pay, a fixed payment fee and any customer acquisition cost you want to allocate per item. Put percentage-based fees in the fee field. Count each cost once. The regular price should be after ordinary refunds and exclude sales tax. Use costs for the same item and check anything left out before judging the result.