Ecommerce KPIs
Coupon code profitability.
Enter the order value, your variable cost and the discount. See margin before and after, how many extra orders cover the discount and the profit at an order lift you choose.
Break-even extra orders = margin before / margin after - 1. A 20% coupon on a $60 order with $30 of cost and 3% fees cuts margin from $28.20 to $16.56, so you need about 70.3% more orders.
Your numbers
Result
Worked example
A $60 order costs $30 to fulfil and carries a 3% payment fee. Margin before = 60 - 30 - 1.80 = $28.20. A 20% coupon makes the customer pay $48; margin after = 48 - 30 - 1.44 = $16.56. Break-even order change = 28.20 / 16.56 - 1 = 70.29%. With 1,000 orders now, a 50% rise to 1,500 gives 1,500 x $16.56 = $24,840 against $28,200 before, a change of -$3,360.
How it works
Margin per order = amount paid - variable cost - payment fee on the amount paid. Enter only costs that scale with an order; fixed costs do not change with a coupon.
Break-even order change = margin before / margin after - 1. Profit with the coupon equals profit without it when orders x margin match: N x m0 = N x (1 + u) x m1. Solving for u gives the formula.
The order change you enter is your own scenario. The calculator does not predict what a coupon will do. Part of the extra redemptions come from people who would have bought anyway, which is why the net change in orders, not the redemption count, is the number to use.
If the discounted margin is zero or negative, no number of extra orders recovers the discount, and the page says so rather than showing a meaningless figure. A percent discount cannot exceed 100% and a fixed discount cannot exceed the order value.
This is pure arithmetic with no outside source: the inputs and the order change are yours.
Basis: No external source is needed: the formulas are the accounting identity for profit per order and the break-even algebra shown above.
Inputs are user-entered figures. Results are planning estimates, not financial advice or a forecast of future performance. Everything runs in your browser. Nothing you type is sent or stored.
FAQ
How do I know if a discount code is profitable?
Compare margin per order before and after the discount, then check whether the extra orders you actually get exceed the break-even order change.
Why is break-even so high for a small discount?
Because the discount comes straight out of margin, not out of revenue. A 20% discount on a $100 order with $50 of margin leaves $30, a 40% cut in margin, so you need substantially more orders to make it up.
Should I include shipping in cost?
Yes if you pay it per order and it is not charged to the customer. Include any cost that scales with each order.
Does this account for customers who would have bought anyway?
Only through the order change you enter. Use the net change in orders after the coupon, not the number of coupon redemptions.