Discount Impact Calculator
See exactly how much a small discount costs you in profit.
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A small discount can wipe out most of your profit
Discounts come straight off revenue, but your job costs don't move — so every dollar off the price comes straight off profit. A 10% discount often cuts profit by far more than 10%. This calculator shows you exactly how much, before you agree to it.
How to use it
- Enter the original job price and the profit you expected to make on it.
- Enter the discount percentage the customer is asking for.
- See the new profit, the percentage reduction, and the discount level that would wipe out your profit entirely.
The formula
Worked example
A $10,000 job with $2,000 profit. A 10% discount drops revenue to $9,000. Costs stay at $8,000, so profit falls to $1,000 — a 50% cut in profit from a 10% discount.
Frequently Asked Questions
Why does a 10% discount cut profit by 50%?
Because your costs stay fixed. The discount comes entirely out of your profit margin, not out of the cost base, so a small percentage off the price can be a huge percentage off your profit.
What discount would wipe out all my profit?
The calculator shows this directly as 'discount that wipes out all profit' — it's your original profit margin expressed as a percentage of the price.
Should I ever offer a discount?
That's a business decision this tool doesn't make for you — it just shows the real cost so you can decide with the numbers in front of you, for example by adjusting scope instead of price.