Margin With Discount Calculator

Created by Mateusz Mucha and Tibor Pal, PhD candidate
Reviewed by Jack Bowater
Based on research by
Brigham, E.F.; Ehrhardt, M.C. Financial Management: Theory and Practice (2016)
Last updated: Jul 25, 2022
Margin with discount combines the two together to allow you to calculate your profit even if you are selling in bulk.

This calculator combines two common problems - your desire to calculate your profit margin (or markup) while giving the customer a discount at the same time.

The base margin, base markup and base revenue values are all of these values before the discount is taken into account. The discount is applied to base revenue and results in discounted revenue. The true margin and true markup fields show your real margin and markup, after the discount has been considered. Let's take an example scenario:

You buy blue jeans at $60 a piece. Usually, you work with a 40% gross margin, so it gives you a sale price of $100 (remember, margin is a ratio of profit to revenue, while markup is a ratio of profit to cost). This would give you a $40 profit, but a customer wants to make a really big order and you're willing to lower your price by 20% and sell it for $80. All things considered, your true gross margin is 25%.

As for most of our calculators, you may solve for any value - for example, you may start with the profit field and work your way up to find out the maximum you may pay your supplier (the cost).

Mateusz Mucha and Tibor Pal, PhD candidate
Cost before discount
$
Base margin
%
Base markup
%
Base revenue
$
How much discount is being applied?
Discount
%
How the discount affects you:
Price after discount
$
True margin
%
True markup
%
Profit
$
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