Breakeven Discount Calculator
Find your discount ceiling. Calculate the maximum discount you can offer while maintaining a minimum profit margin floor.
Unit Economics
Profit vs Discount Depth
Discount Safety Zone
Max Safe Discount: 33.3%
The Floor
You cannot price below $66.67 without breaching your 10% margin rule.
Zero Profit
If you discount more than 40.0%, you will lose money on every unit sold.
Current Health
Your current margin is 40.0%. You have plenty room to negotiate.
Execution Steps
Enter your Product Selling Price.
Enter the Unit Cost (COGS).
Set your 'Minimum Margin Floor' (The lowest margin % you are willing to accept).
The tool calculates the Maximum Safe Discount % you can offer.
Pro Strategy
- Sales teams often give away margin to close deals. Give them this 'Max Discount' number as a hard rule.
- If your Max Discount is <10%, you don't have enough margin to run effective promotions. You need to lower costs or raise base price.
- Clearance sales can exceed the 'Safe' discount if the goal is liquidity, not profit.
Core Concepts
Margin Floor
The absolute minimum profitability required to sustain operations. Often 10-15% for retailers.
Discount Depth
How deep a price cut is. Deep discounts drive volume but erode value and train customers to wait for sales.
Zero-Profit Point
The discount where Revenue = Cost. Selling here generates cash flow but no profit.
What is Breakeven Discount Calculator?
This calculator reverse-engineers the price equation. Starting with your Cost and Desired Margin, it solves for the Minimum Viable Price, and then compares that to your Current Price to find the allowable discount gap.
Best For
- • Setting rules for sales negotiations.
- • Planning Black Friday offers.
- • Determining if you can afford to match a competitor's price.
Limitations
- • Assumes linear costs.
- • Does not account for volume lift (elasticity).
- • Ignores shipping costs unless added to COGS.
Alternative Methods
Discount Ladder
Analyzes the volume lift needed to offset a discount.
Promo Lift Calc
Post-mortem analysis of a campaign.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Wholesale Distributor
Sales reps were giving 20% discounts to close deals, hurting company profit.
Calculated that 15% was the max discount to cover overhead.
Fashion Boutique
Wanted to run a 30% Off Sale.
Input costs showed max safe discount was 25%.