What that discount really costs you
A discount doesn't come out of the price — it comes out of the profit. Here's how much more you'd have to sell just to stand still.
How this is calculated
A discount cuts price but not your costs, so it comes straight out of margin. The new margin iscurrent margin − discount (in percentage points of price), and to earn the same total profit you need current margin ÷ new margin times the sales — the extra volume shown here is everything above your current sales. Cut 10% off a 40% margin and you have to sell a third more units just to break even.
When the discount approaches your margin, the volume you'd need shoots toward the impossible; when it meets or exceeds it, no volume can recover the loss. That's usually the signal to add value instead of cutting price. If you're unsure of your starting number, the profit margin entry breaks it down, and the value-based pricing approach is the alternative to discounting your way to a yes.