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Discount Impact on Profit Calculator

A small discount often eats a big chunk of profit. This tool shows the volume increase you need to break even on a planned discount.

Calculator
Result
Margin drops 33.3%
Old margin per unitKES 300.00
New margin per unitKES 200.00
Margin lost per unit33.33%
Volume needed to break even1.50× current

Discounts only make sense if you can confidently grow volume by the multiplier above.

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Why discounts are so dangerous

Discounts come straight off the margin, not the price. A 10% discount on a 30% margin product wipes out a third of your profit.

Use loyalty, bundle pricing or volume thresholds instead. Veira can model the volume math before you run any promotion.

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Worked examples

10% off on 1,000 with cost 700
  • Old margin 300 → new margin 200 (−33%)
  • You need 1.5× volume just to stand still.

Frequently asked questions

When are discounts worth it?
When clearing dead stock, when acquiring a new customer with strong LTV, or when fixed costs are sunk and volume covers them.
Should I match competitor discounts?
Rarely. Match value, not price. Discount wars hurt everyone.
Does Veira track promotional ROI?
Yes. Veira tags promo sales and reports their margin impact.
What about combos?
Combos preserve margin more than straight discounts. Run the numbers in Veira first.
Are M-Pesa promo cashbacks discounts?
Effectively yes. Account for them when reporting promo margin.

Doing this by hand every time? Veira runs the same calculation automatically on every sale, no spreadsheet required.

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