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A discount calculator has two modes: calculate the sale price from a discount percentage, or reverse-calculate the discount from a known sale price. This one handles both.
The discount formula
Sale Price = Original Price × (1 − Discount % / 100)
Discount Amount = Original Price × Discount % / 100
At $99 original price with 20% discount: - Discount amount = $99 × 0.20 = $19.80 - Sale price = $99 − $19.80 = $79.20
Reverse discount calculation
If you know the original price and sale price:
Discount % = (Original Price − Sale Price) ÷ Original Price × 100
If a $149 item is on sale for $99: ($149 − $99) ÷ $149 = 33.6% off
Why discounts hurt margins disproportionately
A 20% discount on a product with 40% gross margin: - Original: $99 price, $59.40 COGS, $39.60 gross profit (40% margin) - Discounted: $79.20 price, $59.40 COGS, $19.80 gross profit (25% margin)
20% off the price = 50% reduction in gross profit. This asymmetry is why deep discounting is dangerous at low margins.
Common discount structures
| Type | How it works | Best for |
|---|---|---|
| Percentage off | Fixed % discount from list price | Promotions, clearance |
| Fixed amount off | $X off total | AOV (average order value) boosting |
| BOGO | Buy one get one | Volume without lowering price signal |
| Annual plan discount | 15–20% off monthly × 12 | SaaS annual commitment |
| Early bird | First N customers get lower price | Launch pricing |
Frequently asked questions
What does this calculator do? Calculate sale price, discount amount, discount %, and margin impact for any discount scenario.