Calculator Inputs
Use the grid below. It shows three columns on large screens, two on smaller screens, and one on mobile.
Plotly Graph
The chart compares the most important profit and spend values for quick evaluation.
Example Data Table
Use these sample trade promotion scenarios for benchmarking or testing.
| Promotion | Baseline Units | Promoted Units | Baseline Revenue | Promoted Revenue | Unit Cost | Discount / Unit | Allowance | Display Fees | Media Spend | Other Costs | Cannibalized Units | Leakage % |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Retailer A - Endcap Push | 12000 | 15800 | 4.6 | 4.2 | 2.15 | 0.28 | 2400 | 1500 | 2100 | 800 | 350 | 3 |
| Retailer B - Flyer Feature | 8000 | 9700 | 4.4 | 4.05 | 2.18 | 0.24 | 1600 | 900 | 1100 | 500 | 200 | 2.5 |
| Retailer C - Bundle Promotion | 9500 | 12900 | 4.55 | 4.15 | 2.22 | 0.31 | 2800 | 1700 | 1950 | 950 | 420 | 4.2 |
Formula Used
This calculator uses an incremental profit method. It separates true promotional gain from baseline demand and spend leakage.
- Raw Volume Uplift = Promoted Units − Baseline Units
- Adjusted Incremental Units = max(Raw Volume Uplift − Cannibalized Units, 0)
- Promoted Margin Per Unit = Promoted Unit Revenue − Unit Cost
- Incremental Gross Profit = Adjusted Incremental Units × Promoted Margin Per Unit
- Discount Spend = Promoted Units × Off-Invoice Discount Per Unit
- Base Trade Spend = Discount Spend + Allowance + Display Fees + Media Spend + Other Costs
- Leakage Cost = Base Trade Spend × Leakage Rate
- Total Trade Spend = Base Trade Spend + Leakage Cost
- Net Incremental Profit = Incremental Gross Profit − Total Trade Spend
- ROI = (Net Incremental Profit ÷ Total Trade Spend) × 100
This approach works well for trade planning because it measures profit created after accounting for discounts, retailer support, and execution leakage.
How to Use This Calculator
- Enter your normal sales volume as baseline units.
- Enter expected or actual promoted units sold.
- Add baseline and promoted net unit revenue values.
- Enter unit cost to estimate gross profit correctly.
- Add discount, allowance, display, media, and other costs.
- Estimate cannibalized units from shifted demand.
- Enter leakage to cover claims, over-redemption, or waste.
- Press calculate to view ROI, profit, spend, and break-even units.
- Download the result as CSV or PDF for reporting.
Frequently Asked Questions
1. What does trade promotion ROI measure?
It measures net incremental profit generated by a promotion relative to total trade spend. A positive result suggests the campaign created more profit than it consumed in support costs.
2. Why are adjusted incremental units important?
They remove baseline demand and estimated cannibalization. That gives a cleaner view of units truly created by the promotion, not sales that simply shifted from other periods or products.
3. Can the ROI result be negative?
Yes. Negative ROI means trade spend exceeded incremental profit. That often signals weak uplift, low margins, excessive discounts, or costly execution elements.
4. What counts as trade spend here?
Trade spend includes off-invoice discounts, retailer allowances, display fees, media support, other fixed costs, and leakage. These inputs represent the full commercial cost of the promotion.
5. Should promoted unit revenue be gross or net?
Use the realized net revenue per unit during promotion. That makes revenue, margin, and profit outputs more useful for finance and commercial planning.
6. What is leakage rate in trade planning?
Leakage rate estimates overspend caused by claim errors, redemption variance, compliance gaps, or inefficient execution. Adding it helps create more realistic promotion forecasts.
7. How should I compare multiple promotions?
Compare ROI, net incremental profit, break-even units, and payback ratio together. The best promotion is not always the highest uplift campaign if margin quality is weak.
8. Can I use this for forecasts and actual reviews?
Yes. Use forecast assumptions for planning, then replace them with actual values after execution. That helps you evaluate accuracy and improve future promotion decisions.