FREE TOOL
How many more orders does a discount need?
Enter your price, costs and a discount. See how much extra volume it has to bring in to earn the same, and how that grows from 10% to 50% off.
THE SHORT ANSWER
A discount needs more extra orders than its percentage suggests. The volume needed is the margin before the discount divided by the margin after it, minus one.
Calculate it for your store
IN SHORT
- A discount pays only if the extra orders it brings in earn back the margin it gave away. The extra volume needed is the margin before the discount divided by the margin after it, minus one.
- In the worked example, a 100 order leaves 55.00. At 20% off it leaves 36.58, so you need 50% more orders to earn the same. At 50% off it leaves 8.95 and you need 515% more orders. Those figures are illustrative, not a benchmark.
- The volume needed grows faster than the discount, because a discount comes out of margin and not out of price.
- It also assumes the extra orders are new buyers. Customers who would have paid full price and now use the code make the result worse.
- The calculator uses only the numbers you enter and has no benchmark for how much a discount lifts sales. Nothing you type is sent anywhere or stored.
A worked example
Illustrative figures, not a benchmark and not a Lucent client. Computed with the same maths as the calculator.
- Full price (tax added at checkout)
- 100.00
- Left per order at full price
- 55.00
- 10% off: left per order, extra orders needed
- 45.79, 20% more orders
- 20% off: left per order, extra orders needed
- 36.58, 50% more orders
- 30% off: left per order, extra orders needed
- 27.37, 101% more orders
- 40% off: left per order, extra orders needed
- 18.16, 203% more orders
- 50% off: left per order, extra orders needed
- 8.95, 515% more orders
The terms, defined
Margin per order
What one order leaves after tax, refunds, goods, shipping, payment fees and return handling, before any ad spend.
Extra volume needed
The increase in the number of orders that makes total margin equal what you would have earned at full price.
How it is worked out
Four steps, all of them arithmetic you can check by hand.
- 01
Work out what an order leaves now
Take tax, refunds, goods, shipping, payment fees and return handling off the full price. What is left is your margin per order.
- 02
Lower the price
Cut the price by the discount. Tax, refunds and the percentage payment fee follow the price down; goods and shipping do not.
- 03
Work out what it leaves after the discount
Run the same calculation on the lower price. The margin is a smaller number, often much smaller.
- 04
Divide one by the other
Margin before divided by margin after, minus one, is the extra volume you need to earn the same total.
Questions about the calculator
How much more do I need to sell to make up a discount?
Divide what an order leaves before the discount by what it leaves after, then subtract one. In the worked example a 20% discount takes the margin from 55.00 to 36.58, so you need 50% more orders.
Why does a 20% discount need more than 20% extra orders?
Because the discount comes out of margin, which is a fraction of the price. If your costs are fixed per order, a 20% price cut can remove far more than 20% of what you earn on that order.
When does a discount never pay?
When the discounted price no longer covers the cost of goods, shipping and fees. Each order then loses money, and selling more only loses more. The calculator marks this as “never”.
Should I run a discount at all?
Sometimes, and the calculator tells you the bar. A discount can be right to clear stock, win a first order from a customer who will buy again, or match a sale you cannot stay out of. It is rarely right as a permanent habit, because it trains customers to wait for it.
Does this account for customers who would have bought anyway?
Not directly. It gives the extra volume needed in total. If some of your sales come from people who would have paid full price, the extra orders have to be larger still, so treat the result as the minimum.
Do I enter the price with or without tax?
Enter the price the customer pays at full price, then put the tax rate inside it in the tax field. In the US, where tax is added at checkout, enter 0. In the UK and Australia, prices normally include VAT or GST.
Is the result a forecast?
No. It is arithmetic on your numbers. It shows how much a discount has to bring in, not whether it will.
Does Lucent Commerce store the numbers I enter?
No. The calculation runs in your browser. Nothing you type is sent to a server or saved.
Where this fits
The calculator gives you the bar a discount has to clear. These are the places we help you set it.
Break-even ROAS calculator
What an order leaves, and the ROAS ads need to clear.
Black Friday and holiday playbook
Sitewide or targeted, and the rest of the countdown.
Bundle pricing calculator
Whether a bundle beats a straight discount.
Free store audit
A prioritized list of fixes, some of which you can do yourself.