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Maximum Discount Calculator
Find the deepest discount you can offer without breaking your minimum margin. Computes the price floor from unit cost and fees, then the max discount dollars and percent.
Discount Limit Inputs
Current Selling Price ($)
All-In Unit Cost ($)
Minimum Acceptable Margin (%)
Fee Rate on Sale Price (%)
Discount Limits
Current Price$120.00
Current Net Margin36.7%
Price Floor$87.50
Max Discount ($)$32.50
Max Discount (%)27.1%
Discount ceiling: Never price below $87.50 — that floor preserves your 15.0% minimum margin after fees. Your deepest safe discount is 27.1% ($32.50 off). Deeper cuts need lower costs or a strategic loss-leader plan.
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Authoritative References
Frequently Asked Questions
How do you calculate the maximum allowable discount?
Floor Price = Unit Cost / (1 - Minimum Margin - Fee Rate), then Max Discount = Current Price - Floor. A $120 price with $70 cost, 15% minimum margin, and 5% fees gives a $87.50 floor and a $32.50 (27.1%) max discount.
What is a price floor?
The lowest price that still delivers your minimum acceptable margin after all variable deductions. Discounting below the floor loses money on every unit unless it is a deliberate, capped loss-leader.
Should fees count when setting discount limits?
Yes — payment and marketplace fees scale with the discounted price, so ignoring them overstates how deep you can cut. Always include the fee rate in the floor formula.
What is a loss-leader discount?
A planned below-floor price to acquire customers or clear stock, capped by units, time, and budget. Track payback: the loss per unit times units must be covered by future margin from acquired customers.
How often can I run max-depth discounts?
Reserve max-depth cuts for 2-4 clearance events per year. Frequent deep discounting trains shoppers to wait and destroys full-price conversion — use 10-20% promos for routine events.