How the Discount Calculator works
Cutting price cuts profit faster than it cuts revenue because most of your costs (product, FBA fee, shipping) stay the same. Only the referral fee, advertising share and returns allowance shrink with the price.
This calculator shows the profit per unit before and after, and how many more units the lower price has to sell before it earns the same money.
Formula
- New price = Price − Discount
- Referral fee after = max(New price × Category %, minimum)
- Profit after = New price − Fixed costs − Referral after − New price × (Ads % + Return %)
- Units needed per 100 = Profit before ÷ Profit after × 100
- Max discount = (Price − Break-even price) ÷ Price × 100
Example
A 15% cut to $25.49 drops profit from about $9.80 to $6.40, so you need about 153 units for every 100 you sold before.
Selling price: 29.99Amazon category: home_kitchenProduct cost (per unit): 7Inbound shipping (per unit): 1Discount %: 15FBA fulfillment fee: 4.75Advertising (PPC) % of price: 10Return rate %: 3
Frequently asked questions
Does the referral fee really drop?
Yes, it is a percentage of the price the customer pays, subject to the category minimum.
Discount or coupon?
A coupon shows a badge and usually lifts conversion more, but carries a per-redemption fee. Use the Coupon Profit Calculator to compare.