Guide
Buy-one-get-one and bundle offers: what the real discount does to your margin
A promotion is a trade: you give up part of the price in the hope of selling more. Whether the trade works depends on the margin you keep and the extra volume you win, and the first of those is easy to calculate. This page takes an offer, shows what the customer really pays, what you earn from it, and how many more offers you would have to sell to be as well off as you were at full price.
The two kinds of offer
In “buy some, get some” mode you enter the price and cost of one item, how many the customer buys at full price, how many they get on offer, and the discount on those. A discount of 100 means free and 50 means half price. In bundle mode you list different items with their prices and costs, one per line, and enter a single bundle price. Both modes show the same results, so offers can be compared.
What the page works out
It starts with the full price of all items in the offer and what the customer pays. From these come the effective discount and the average price per item. Then it subtracts your cost to get the profit on the offer and the margin on it, and compares them with selling the same items at full price. The last line is the extra volume needed to earn the same total profit, assuming the full-price set is the benchmark.
A worked example
The default is buy one, get one free, with a price of 30 and a cost of 12. Two items have a full price of 60.00, the customer pays 30.00, so the effective discount is 50.00% and the average price is 15.00. Your cost is 24.00, the profit is 6.00 and the margin 20.00%. At full price the same two items would earn 36.00, a margin of 60.00%. You would need 500.0% more offers to earn what full-price sets earn. Buy two, get one at half price changes the picture: three items worth 90.00 cost the customer 75.00, an effective discount of 16.67%. The profit is 39.00 and the margin 52.00%, against 54.00 at full price, so the volume needed is 38.5% more. A bundle of a 25 shirt, a 15 cap and an 8 pair of socks, costing 9, 5 and 2, priced at 40 instead of 48, is a 16.67% discount with a profit of 24.00, a 60.00% margin, and needs 33.3% more volume.
Why margin disappears faster than the discount
A 50% discount takes your margin from 60% to 20% because your cost does not change. The deeper the discount, the more volume you need, and the relationship is not linear. A 16.67% discount needs 38.5% more volume; a 50% discount needs 500%. This is the reason to give free items only on products with a high margin, or where you are clearing stock you would otherwise write off.
Edge cases
If the offer loses money, the page says so and the extra volume line reads “never: the offer makes no profit”. If the offer earns at least as much as full price, which can happen when the bundle price is above the sum of the full prices, the line says none. Items bought and items on offer must be whole numbers of at least 1. A bundle needs at least two items, and each line must have a name, a price and a cost.
Limits
The comparison assumes that without the promotion you would sell full-price sets at the same cost. It ignores the cost of advertising the offer, the customers who would have paid full price anyway, and any lasting effect on how much people will pay later. Treat the volume figure as a hurdle: if you doubt you can clear it, change the offer.
Related tools
- Discount Calculator gives the price after a simple percentage off.
- Wholesale vs Retail Tiered Pricing Calculator shows what volume breaks do to your margin with trade buyers.
- Profit Margin Calculator finds the margin on one ordinary sale.
- Markup vs Margin Calculator rebuilds a price from cost when a promotion ends.
Checked against the current version of the Bundle and BOGO Discount Margin Calculator on .