What does a sale really cost you?

A discount comes straight out of your profit, not your price. See how many more you have to sell before a sale earns you a single extra dollar.

Your numbers

Sale price: $19.20
Profit per unit before: $15.00
Profit per unit on sale: $10.20
Units to earn the same profit: 148

You need to sell 48 more units than usual just to earn the same profit.

The kit shows profit for every order line, so after a sale you can see what it really earned.

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How the sum works

Sale price = normal price times (1 minus the discount).
Profit per unit on sale = sale price minus cost. The cost does not shrink with the price.
Units to earn the same profit = normal units times normal profit per unit, divided by sale profit per unit, rounded up.

Questions

Why does a 20% discount cut profit by more than 20%?

Because your cost stays the same. On a $24 product that costs $9, a 20% discount takes $4.80 off the price and all $4.80 comes out of your $15 profit. That is a 32% cut in profit per sale.

When is a sale worth running?

When it brings enough extra sales to pass the number shown here, when it clears stock that is tying up cash, or when it wins customers who come back at full price.

What can I offer instead of a discount?

Free postage over a set order value, a small free gift, or a bundle. Each can cost you less than a percentage off while feeling just as generous.

This was one sum

The Back Office Kit runs all of them, for every product, together.

One Excel workbook that prices your products, tracks your stock, logs your orders and builds your invoices and wholesale line sheet. One payment of $19. Download the moment you pay.

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The dashboard tab of the Back Office Kit: revenue, profit, cash, stock value and items to reorder.

What does a sale really cost you?

How the sum works

Questions

The Back Office Kit runs all of them, for every product, together.

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