How much is left after a discount: calculate before, not after

A discount almost always gets calculated off the markup. A 60% markup looks generous, "−20% on everything" feels safe, and the sale goes live. A month later, revenue is at a record high and there is less money in the account than in a quiet month before the peak.

The reason is not that the discount was too deep. The reason is the order of operations: the depth got announced first, then someone checked what was left. The right order is reversed.

Why a discounted order costs more than a normal one

A discount only reduces one part of the bill — what the customer pays. Everything else either stays the same or goes up during the peak.

• Cost of goods does not change. You already paid it, at the old price.
• Shipping does not change. If you offer "free shipping over X," the discount also pushes more orders under that threshold — so you start paying for shipping on orders that used to clear it.
• Marketplace commission is calculated off the sale price, so it drops too — but slower than your profit does, because profit is only a slice of the price to begin with.
• Returns get more common during a peak, and you pay for the shipping both ways. One returned order eats the profit from several completed ones.
• Processing costs more during a peak, not less: more messages, more clarifying questions, sometimes paid extra hands.

The order you calculate this in

First, the minimum price at which the order still makes sense. Then, and only then, the discount depth.

1. Cost of goods, fully loaded: supplier price, shipping to you, duty, packaging.
2. Shipping you pay — not what the customer pays.
3. Marketplace commission for your category. Use your actual rate from your seller dashboard: it depends on category, and someone else's number is worth nothing here.
4. Losses from returns. Use your own return rate from last season, not from a quiet month.
5. Cost of processing — the hourly cost of whoever handles this order, multiplied by the real time it takes.

The sum of these five items is the floor. A price below it is not "less profitable" — it is a loss.

A worked example

The numbers below are illustrative, for the arithmetic — substitute your own. Say a product sells for €30, costs €15 including shipping and packaging, you pay €2 for shipping yourself, and processing costs €1.50.

Line item	Normal order	20% discount
Price to customer	€30	€24
Cost of goods	−€15	−€15
Shipping	−€2	−€2
Processing	−€1.50	−€1.50
Left over	€11.50	€5.50

The discount was 20%, and profit dropped by more than half. And that is before marketplace commission, and before a single return. Add one return for every ten orders, and there is almost nothing left from the discounted batch.

This is where it becomes visible why "−10%" and "−30%" are decisions of a different class, not neighboring options on the same list.

Minimum discount depth on marketplaces

Some marketplaces and deal platforms do not accept every discount into their promotional placements — there is often a minimum depth requirement below which a submission gets rejected. That means the decision is not always yours, and checking whether your floor clears that depth needs to happen before you submit, not after the product is already in the sale.

If it does not clear, there are exactly three options: a different category of product for the sale, a different purchase price, or skipping this sale entirely. The third one is a normal decision, not a defeat.

What this calculation gives you besides the discount itself

The side effect is usually more useful than the main one: it becomes visible which items cannot absorb even a small discount. That is the same list you later use to build bundles — pair a high-floor item with a low-floor one, and the bundle discount comes out honest.

At the same time, you can see what one return actually costs you, and whether it is worth offering a discount for prepayment. That is its own number, and during a peak it matters more than in any other month.

Where to start

Take five products you are definitely putting on sale, and work out the floor for them — all five line items, no shortcuts. That is half an hour of work.

Then compare the floor to the price you have already promised. If something does not line up, there is still time to change the depth or swap the product. The full formula for a normal order is in store unit economics.