A promo drives sales but gives away margin — the net can go either way. Enter your redemptions, order value, discount, and margin to see the real net profit, then plan every promo.
Net the discount given against the margin earned — per promo.
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Compare the margin the coupon-driven sales generate against the discount you gave away. Revenue times your gross margin gives the gross profit; the discount percentage times revenue gives the cost of the promo; the difference is your net profit. The subtlety is incrementality — sales you'd have made anyway at full price aren't a gain, they're pure margin given away. Where possible, judge the promo on incremental sales, not total.
When it drives enough incremental sales (or high-value new customers who return) to outweigh the margin given away. Good uses include acquiring first-time customers with a strong lifetime value, clearing slow stock, or winning back lapsed buyers. Blanket discounts to customers who'd have bought anyway usually just erode margin. This calculator shows the net so you can tell the difference before committing.
A ready-to-use spreadsheet (Excel & Google Sheets): net profit of a promo after discounts, revenue-versus-margin breakdown, and scenarios for discount levels and redemptions — delivered instantly after checkout. AI-assisted, human-built; not financial advice.
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