To calculate a discount, multiply the original price by the discount rate, then subtract that amount from the original price. For eCommerce, the important second step is checking whether the discounted price still leaves enough margin after fees, shipping, ads, and refunds.
Discount formula
Discount amount = Original price × Discount %
Sale price = Original price - Discount amount
Original price
Discount
Discount amount
Sale price
£50
10%
£5
£45
£50
20%
£10
£40
£80
25%
£20
£60
£120
30%
£36
£84
Why discounts are dangerous for margin
A 20% discount does not reduce profit by only 20%. If a product has a 30% margin, a 20% discount can remove most of the profit. Costs such as product cost, platform fees, packaging, and shipping may stay the same.
Discount strategy
Use discounts to clear stock intentionally.
Use bundles to protect average order value.
Avoid training customers to wait for sales.
Check break-even price before launching codes.
Measure profit, not just conversion rate.
Common mistakes
Discounting without calculating margin.
Stacking codes accidentally.
Using permanent sales that reduce trust.
Ignoring ad cost on discounted orders.
Judging success by revenue only.
Forgetting refunds on sale items.
Practical takeaway
Discounts are tools, not magic. Before running a promotion, calculate sale price, contribution margin, break-even ROAS, and expected volume. A good discount campaign should create profitable action, not just cheaper sales.
FAQ
How do I calculate a discount?
Multiply the original price by the discount percentage, then subtract the discount amount from the original price.
What is 20% off £50?
20% of £50 is £10, so the sale price is £40.
Do discounts affect profit more than revenue?
Yes. A discount reduces revenue while many costs stay the same, so profit can fall sharply.
Should eCommerce stores use discounts often?
Discounts can work, but they should be planned with margin, stock, and customer behaviour in mind.
Is stacking discounts risky?
Yes. Multiple discounts can accidentally push a product below break-even.
Business note: CalcBeacon eCommerce and marketing guides are educational. They explain calculations, pricing logic, and profitability checks, but they are not tax, legal, accounting, or financial advice. For important business, tax, VAT, or platform compliance decisions, check official guidance or speak with a qualified professional.
