Discount Break-even Tool

When to use this tool

Use it before you run a promotion. A discount cuts the contribution you keep on every sale, so you have to make up the lost margin with extra volume — and because you now earn less per unit, the extra volume needed is almost always far bigger than the discount itself. This tool turns “20% off” into the real number of units you’d need to sell just to stand still.

How to use it

1. The item. Enter the current sale price inc VAT and the item cost ex VAT. The cost is everything it takes to make or buy one — ingredients, packaging and an allowance for waste — rolled into a single figure.
2. The promotion. Enter the discount as a percentage off the sale price, or type the discounted price and let the tool work out the percentage. It re‑runs the contribution maths at the lower price and shows it beside full price in the per‑item table.
3. Your volumes. Enter the units you currently sell as your baseline, and a max units figure — a realistic ceiling that caps the forecast slider and marks a guide line on the break‑even chart. Now the answer reads as real numbers — “you’d need 1,448, not 1,000” — not just a percentage.
4. Royalty or commission (optional). If you pay a royalty or commission on sales, switch it on, set the rate, and choose whether it’s charged on net or gross sales. It bites harder on a discount because you keep less per unit to begin with.
5. Forecast the lift. In Sales forecast, set the uplift you expect from the promotion. It starts at the typical food & drink figure and flags when you set it above or below that. The result tells you whether the volume you expect would leave you better or worse off than not discounting.
6. Read the chart and save. The break‑even chart shows the extra volume the discount must find; drag the slider to test different forecasts live. When you’re done, export a PDF report to keep or share.

How the sales forecast works

A discount only pays off if extra volume more than makes up for the thinner margin. The sales forecast starts your expected uplift at the typical food & drink figure — a price cut tends to lift sales by around 0.8× the percentage off, so 10% off is worth roughly 8% more sales. Set it higher or lower to match your own promotion: the tool shows how far you are from that typical lift and whether the volume you expect would leave you better or worse off than not discounting at all. If a discount pushes contribution to zero or below, no amount of volume can rescue it — you simply lose more on every extra sale.

Jargon buster

Contribution per unit

Net price less item cost and any royalty — what each sale adds before fixed overheads. It’s what a discount eats into.

Net price

The sale price with VAT removed — all the margin maths is worked out on this figure.

Break-even units

The number of discounted units you’d have to sell to make the same total contribution you make at full price.

Extra units

Break‑even units minus the units you currently sell — the additional volume the promotion has to generate just to stand still.

Expected uplift

The extra sales you think the discount will bring, as a % above your current volume. It starts at the typical food & drink lift — adjust it to match your promotion.

Royalty / commission

A fee paid as a % of each sale, on net or gross. Optional — switch it on only if your business pays one.

Good to know

• A 20% cut typically needs 40–60% more units just to break even — far more than most people expect.
• Pick your country from the currency selector to set the symbol and tax treatment; US prices are treated as pre‑tax, so tax defaults to 0%.
• Nothing you type leaves your browser — your figures stay on this device.