Free tool / Pricing

Discount impact calculator

A small percentage off revenue can remove a much larger percentage of profit. Check the requested discount before agreeing to the same scope at a lower price.

No signup. Calculations stay in this browser. Default values are illustrative, not market benchmarks.

Your assumptions

The price before the requested discount.
Hold cost constant to isolate the effect of a price reduction.
A percentage of the original price.
The margin floor you want to preserve.
A label only. No exchange-rate conversion.

Results

Discounted selling price
18,000 USD
Profit before discount
5,000 USD
Profit after discount
3,000 USD
Margin after discount
16.7%
Original positive profit removed
40.0%
Price for target margin
18,750 USD
Maximum discount at target margin
6.3%

Calculation

discounted price = price × (1 − discount); price floor = cost ÷ (1 − margin); maximum discount = max(0, 1 − floor ÷ original price)

Amounts and percentages are rounded for display. These are deterministic checks for your assumptions, not guarantees.

Worked example: 10% off the quote removes 40% of profit

A 20,000 quote with 15,000 cost earns 5,000 gross profit. A 10% discount cuts the quote by 2,000. With the same cost, profit falls to 3,000 and gross margin falls from 25% to 16.7%. That 2,000 concession removes 40% of the original profit.

Find a price floor with a named assumption

To retain a 20% margin at a 15,000 cost, the price must be at least 18,750. The largest discount from 20,000 is therefore 6.25%, displayed to one decimal place. Use the full-precision calculation behind the result when setting a final rounded quote, then check that quote again. If the original price already misses the target, a zero discount does not fix it.

Trade scope, timing or risk as well as price

This calculator holds delivery cost fixed. Removing work may lower cost; rushing may increase it. Explore the discount worked example, use the scope-change calculator for a change in effort, and follow the budget negotiation guide to make the trade explicit.

Frequently asked questions

Can a discount remove more than 100% of profit?

Yes. If the price reduction exceeds the original positive profit, the job moves into a loss and the percentage of original profit removed exceeds 100%.

Why is the profit-reduction percentage sometimes not defined?

The percentage compares the reduction with an original positive profit. When the original quote has zero or negative profit, that comparison is not useful; the calculator still shows the profit amounts and margin.

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