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Discount and Offer Profit Calculator: how much more you need to sell

How many more sales a discount, BOGO or free gift needs to earn the same gross profit.

  • Free to use
  • Runs in your browser
  • No sign-up

How to use the Discount & Offer Profit Calculator

Read what the guide says

This is the Discount & Offer Profit Calculator.

How many more sales a discount,

BOGO or free gift needs to earn the same gross profit.

Enter the usual price (tick the box if it includes GST), the cost of one unit,

and any costs you pay on every sale, such as delivery.

Or press Try an example to fill in sample details.

Choose the offer and its size, and if you like,

how many you usually sell in the offer period and how many more you expect.

Read how many more sales the offer needs, compare discounts in the ladder,

and copy the summary for your team.

It works out gross profit only: rent, salaries and advertising are not included.

It runs in your browser, so nothing you type is uploaded.

Try it free on this page.

Runs in your browser. Your numbers are not uploaded.

The product
₹

What the customer pays for one unit today, before any offer.

₹

What one unit costs you: stock, raw material, packing. Leave it blank and fill in the margin instead if you only know that.

%

Used only when the cost is blank: the share of the price before GST that is left after the cost.

₹

Costs you pay on every sale whatever the price, such as delivery, a payment gateway fee or a carry bag.

The offer
%

Percentage off the usual price.

The offer period (optional)

How many you sell in the same number of days without an offer. Use last year's figure for a festival.

%

Your own estimate of how many more you will sell because of the offer.

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Embed this tool on your websiteFree. Paste one code; it runs in your visitors' browsers.

Copy this code into a page of your site. The tool sets no cookies and sends nothing your visitors type to us. Change height="760" if it needs more room.

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Open any of our browser tools, such as the GST Calculator.

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Press Copy code.

The code is a frame with the tool in it, plus a short credit line that links to the tool's page.

In your website's editor, add an HTML block where you want the tool, and paste the code.

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If the tool needs more room, change the height in the code.

Publish the page, and the tool works on your site.

Here, it's on a sample page for a made-up sweet shop.

Visitors use it right there. It sets no cookies, and sends nothing they type to us.

The credit line under it links to the tool on DigitalSnot.

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About the Discount & Offer Profit Calculator

Before you run a festival sale, see what the offer does to your profit. Enter your selling price, what one unit costs you and the offer: a percentage off, a flat amount off, buy one get one free, or a free gift. You get the profit on each sale, the extra sales you need to earn the same gross profit, the discount at which you stop making money, and a ladder of common discounts. GST is taken out of prices that include it. It runs in your browser.

How it works

  1. Step 1

    Enter the usual price (tick the box if it includes GST), the cost of one unit, and any costs you pay on every sale, such as delivery.

  2. Step 2

    Choose the offer and its size, and if you like, how many you usually sell in the offer period and how many more you expect.

  3. Step 3

    Read how many more sales the offer needs, compare discounts in the ladder, and copy the summary for your team.

Why discounts need so many extra sales

A discount comes out of your margin, not just your price. If a ₹1,000 product costs you ₹600, a 20% discount cuts your gross profit per sale from ₹400 to ₹200, so you need twice as many sales, 100% more, to earn the same. The thinner your margin, the faster the extra sales needed grow.

GST and offers

Under section 15(3)(a) of the CGST Act, a discount shown on the invoice at the time of sale is not part of the taxable value, so GST is charged on the discounted price, as the calculator does. CBIC Circular 92/11/2019-GST treats buy one get one free as two items sold for one price, not a free supply. Input tax credit cannot be claimed on free gifts, so enter a gift's cost including GST.

What this tool cannot do

It works out gross profit only: rent, salaries and advertising are not included. How many more customers an offer brings is your own estimate. It does not count customers who come back later, or sales you would have made anyway at full price. It is not tax advice: check the GST treatment of your offer with your accountant.

Frequently asked questions

How do I work out how many more sales a discount needs?

Divide your gross profit per sale at full price by the gross profit per sale with the discount. A ₹600 product that costs ₹360 earns ₹240; at 15% off it sells for ₹510 and earns ₹150. 240 ÷ 150 = 1.6, so you need 60% more sales to earn the same gross profit. The calculator does this for any offer.

Is buy one get one free the same as 50% off?

Per unit, both give away half the price, so if your gross margin is under 50%, both lose money on every unit. The difference is volume: buy one get one free makes each customer take two units, so you earn or lose twice as much per customer and use twice the stock. Enter both offers here to compare them.

Should I enter prices with or without GST?

Enter the price the customer pays and tick "The price includes GST" if it does, with your GST rate. The calculator takes GST out first, because GST is not your income: you pass it on to the government. Enter your cost without GST if you claim input tax credit on it, and with GST if you do not.

What is a break-even discount?

It is the discount at which a sale only just covers the cost of the product and the other costs you pay on every sale. At a deeper discount every sale loses money, however many you make. It equals your gross margin after those costs: a product with a 35% margin breaks even at about 35% off.

Is a free gift cheaper than a discount?

Often, because a gift costs you what you paid for it, not its printed price. A gift printed at ₹200 that cost you ₹80 takes ₹80 from your profit per sale, while ₹200 off the price takes ₹200, less the GST in it. Use the gift's cost including GST, since you cannot claim input tax credit on free gifts.

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