Discount Calculator

No. A 20% discount followed by a 10% discount gives 28% total, not 30%. The second discount applies to the already-reduced price: $100 x 0.80 x 0.90 = $72 (28% total discount).

Discounting has a leveraged impact on profit. With a 40% margin, a 10% discount cuts profit by 25%. The required sales increase to maintain profit = discount / (margin - discount). For 10% discount with 40% margin: 10/30 = 33% more sales needed.

Discounts are effective for clearing excess inventory, stimulating demand during slow periods, acquiring new customers, and rewarding loyalty. Avoid habitual discounting, which trains customers to wait for sales and erodes brand value.

A discount is the percentage or dollar amount reduced. The sale price (final price) is what the customer pays after the discount. They represent different aspects of the same price reduction.

Trade discounts are chain discounts offered to channel partners. Example: list price $100 with 30/10/5 trade discounts. Net price = $100 x 0.70 x 0.90 x 0.95 = $59.85. Each discount applies sequentially.

It means '2% discount if paid within 10 days; otherwise, full payment due in 30 days.' The annualized cost of not taking this discount is about 36.7%, making it almost always worth taking.

Not necessarily. Excessive discounts can signal low quality, damage brand perception, attract price-sensitive customers with low lifetime value, and create unsustainable margin pressure. Moderate, strategic discounts outperform blanket deep discounts.

Original Price = Discounted Price / (1 - Discount Rate). Example: if the sale price is $75 after a 25% discount, the original was $75 / 0.75 = $100.

A loss leader is a product sold at or below cost (very deep discount) to attract customers who will then purchase other, profitable items. Common in grocery stores (discounted milk or bread), electronics (discounted printers with expensive ink), and SaaS (free tier with paid upgrades).