Calculator
Example data table
| Scenario | Subtotal | Shipping | Promo | Discount | Total after | Effective discount |
|---|---|---|---|---|---|---|
| 15% off items (cap 25) | $120.00 | $10.00 | Percent on items | $18.00 | $122.07 | 13.85% |
| $10 off items | $80.00 | $8.00 | Fixed on items | $10.00 | $82.34 | 11.36% |
| Free shipping | $60.00 | $9.00 | Shipping only | $9.00 | $55.88 | 13.04% |
Formula used
Discount calculation
- Percent: Discount = Base × (Percent ÷ 100).
- Fixed: Discount = min(Fixed amount, Base).
- Free shipping: Discount = Shipping charged.
- Base: Items only, or Items + Shipping (per rule).
- Caps: Total discount is limited by promo cap and optional overall cap.
- Stacking: “Best” picks the larger discount; “Stack” applies sequentially on remaining amounts.
Totals, fees, and profit
- Taxable base: Items after discount + (Shipping after discount if taxable).
- Tax: Taxable base × (Tax rate ÷ 100).
- Total paid: Items after + Shipping after + Tax.
- Processing fees: (Total paid × Fee rate) + Fixed fee.
- Estimated profit: Revenue excluding tax − COGS − Shipping cost − Fees − Marketing cost.
- Monthly impact: Blends full‑price and redeemed orders using redemption and lift.
How to use this calculator
- Enter your typical items subtotal, shipping charge, and tax rate.
- Choose whether shipping is taxable and whether the promo applies before tax.
- Define Promo A, and optionally Promo B, including minimums and caps.
- Select a stacking mode to compare, pick the best, or stack sequentially.
- Add fees and cost assumptions to estimate profit impact per order.
- Set monthly orders, redemption rate, and expected lift for scenario forecasting.
- Click Calculate Impact to see results above the form, then download CSV or PDF.
Discount rate and contribution margin
A promo’s real cost is the effective discount on the customer’s total paid amount. When the code applies only to items, tax and shipping can dilute the apparent discount. Use the calculator’s “effective discount” and “revenue excluding tax” to compare apples to apples. Pair that with your gross margin or COGS inputs to see the post‑promo contribution left to fund shipping cost, payment fees, and marketing. For stacked codes, compare “best” versus “stack” to avoid accidental over‑discounting.
Order lift and break-even analysis
Discounts are justified when incremental profit from additional orders exceeds profit lost on discounted orders. The calculator estimates monthly lift by blending baseline orders with the expected percentage lift. Review “incremental profit” and “break‑even lift” to understand how many extra orders you must generate to cover the discount, especially when fees scale with total paid. Use scenarios to test whether a cap, minimum subtotal, or shipping-only offer improves profit per order.
Redemption, cannibalization, and targeting
High redemption is not always good. If loyal customers who would have purchased anyway redeem the code, you are mostly transferring margin. Use redemption rate to model cannibalization, then compare scenarios for new‑customer targeting, minimum cart thresholds, or caps. Consider splitting Promo A and Promo B to test a smaller incentive for returning customers.
AOV, shipping, and tax interactions
Promos can change basket composition. A fixed discount tends to push customers to add low‑margin accessories, while a percent discount can erode margin on premium items. Free shipping may increase conversion but also raises your shipping cost exposure. Toggle whether shipping is taxable and whether promos apply before tax, because these rules change the final total and fee base. If you use free‑shipping thresholds, model the extra items added to qualify and the higher COGS.
Reporting cadence and test design
Treat every promo as an experiment. Track conversion rate, AOV, gross margin, return rate, and customer acquisition cost by cohort. Run a defined window, use unique codes per channel, and keep a holdout when possible. Export CSV/PDF results from this tool to share assumptions, then rerun with actuals to tighten forecasts. Note seasonality so results compare across weeks.
FAQs
What does “effective discount” mean here?
It is the discount divided by the customer’s total paid amount, including shipping and tax when applicable. It helps compare different promo structures on the same basis.
How do I compare free shipping versus a percent-off code?
Set Promo A to Shipping Only and enter your shipping cost. Then set Promo B to Percent and choose the same order values. Compare profit per order and monthly impact to see which performs better.
What is the break-even lift metric?
Break-even lift is the additional order volume needed so incremental profit offsets promo-driven margin loss. If projected lift is below break-even, the promo likely reduces total profit.
How should I choose a redemption rate?
Use recent campaign data by channel and customer type, then start with a conservative midpoint. If you expect leakage to coupon sites, increase redemption and check how profit changes under that stress case.
Why do payment fees change the outcome?
Percentage fees apply to the total paid amount, so discounts that keep totals higher can still generate larger fees. Adding a fixed fee per transaction can also penalize low-value orders more heavily.
Can I evaluate two promo codes at once?
Yes. Enter Promo A and enable Promo B, then choose Compare, Best, or Stack. The results show discounts, totals, and profit so you can decide which rule set is safest.