Free Tool
Discount Calculator
A 20% discount takes more than 20% of your margin. Enter the original price, the discount and your cost per unit, and this calculator shows the sale price, the saving, and the margin that is left — including stacked discounts, which multiply instead of adding.
Estimates and scenarios for planning purposes only — not financial advice. The results on this page are built from the numbers you enter. They are planning aids, not predictions, and not financial, tax or legal advice. Nothing you enter leaves your browser.
What this tool does
The sale price is the original price × (1 − discount%). A $100 product at 20% off sells for $80, saving the buyer $20. The margin after the discount is (sale price − cost) ÷ sale price × 100: with a $50 cost, the margin is (80 − 50) ÷ 80 × 100 = 37.5%, down from 50% before the discount.
Stacked discounts multiply, they do not add. A 20% discount followed by 10% is not 30% off: the first discount takes the $100 product to $80, and the second takes 10% off the $80, giving $72 — a 28% total discount, not 30%. Many shops get this wrong, and the customer is the one who notices.
Try it
Waiting. Enter the price and discount and press Calculate discount.
How it works
Sale price = original price × (1 − discount%). Amount saved = original price − sale price. Total discount = saved ÷ original price × 100. Margin after discount = (sale price − cost) ÷ sale price × 100. With a second discount, the sale price is multiplied again by (1 − second discount%): the discounts apply in sequence, each to the already-reduced price.
Margin is calculated on the sale price, not the original: a $50 cost on an $80 sale price is a 37.5% margin, not 50%. That is the number that decides whether the discount is affordable, and it is the figure most sellers forget to check.
Assumptions and limitations
- A discount cuts margin faster than it cuts price: a 20% discount on a product with a 50% margin removes 40% of the margin. Check the margin figure, not just the sale price, before running a promotion.
- The calculator models one unit. It does not model whether a discount brings in more sales, or whether those extra sales make up for the lower margin — that is a question about your customers, not about arithmetic.
- Tax is not included. If tax is charged on the sale price, the customer pays tax on the discounted price in most jurisdictions — check your own jurisdiction's rules; this tool does not calculate tax.
Worked example
Example: a $100 product at 20% off, with a second stacked discount of 10%, and a cost of $50. After the first discount: $100 × 0.80 = $80. After the second: $80 × 0.90 = $72. Total saved: $28 (28% off — not 30%). Margin after discount: (72 − 50) ÷ 72 × 100 = 30.6%.
Frequently asked questions
Why are stacked discounts not added together?
Because the second discount applies to the already-reduced price, not the original. 20% off $100 is $80; 10% off $80 is $72 — a total of 28% off, not 30%. Adding the percentages overstates the discount.
Why does a 20% discount hurt margin so much?
Because margin is what is left after the cost, and the cost does not fall. On a $100 product with a $50 cost, the margin is $50; at 20% off the margin is $30 — a 20% price cut removed 40% of the margin.
Can the margin be negative?
Yes — whenever the sale price falls below the cost. The calculator says so plainly, because selling at a loss is a decision that should be made deliberately, not discovered later.
Should I enter the cost including fees?
For the most honest margin, yes: include the fees and shipping you pay per sale, not just the product cost. Otherwise the margin shown will be higher than the real one.
Does the discount include tax?
No. Tax is not calculated here. In most jurisdictions tax is charged on the discounted price — check your own jurisdiction's rules.