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Margin with discount calculator

See how a selling-price discount changes profit while the underlying cost stays fixed.

Calculator

Cost
$100.00
Before discount: Selling price before tax
$125.00
Before discount: Profit
$25.00
Before discount: Margin
20.00%
Before discount: Markup
25.00%
Discounted selling price
$112.50
Discount rate
10.00%
Price reduction
$12.50
Profit after discount
$12.50
Margin after discount
11.11%
Markup after discount
12.50%

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How this calculator works

First reconstruct the regular selling price from a known pair of pricing measures. Apply a percentage reduction or select a target final price, margin or markup to infer the discount. Cost stays fixed. A full discount leaves a zero price and a loss equal to cost; margin on zero revenue is undefined and is omitted. All figures exclude sales tax, overhead and any supplier rebate.

Formula

Sale price = regular price x (1 - discount). Final profit = sale price - cost. Final margin = final profit / sale price. Final markup = final profit / cost. Discount for a target margin = 1 - cost / ((1 - target margin) x regular price).

Worked example

A $100 cost with 20% initial margin gives a $125 regular price. A 10% discount leaves $112.50, $12.50 profit, 11.111111% margin and 12.5% markup. A 20% discount reaches the $100 break-even price.

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Frequently asked questions

Can a small discount remove most of the profit?

Yes. A discount is a share of selling price, while profit may be a much smaller part of that price. Track the remaining dollar profit as well as the new margin.

What is the largest discount before a loss?

With fixed cost, break-even occurs when sale price equals cost. The maximum discount fraction equals the original margin fraction.

Can I target a higher margin?

Only a target attainable through a price reduction is accepted. A higher price belongs in the margin and markup tool.

Sources

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