Sales Calculator
Result
Net sale price
- Total revenue
- 20,000.00
- Total cash cost
- 11,250.00
- Gross profit
- 8,750.00
- Gross margin
- 43.75%
- Markup
- 77.78%
A discounted sale brings in less than the list price, and the interesting part is what the discount does to the profit rather than to the revenue. This page starts from four things a seller knows — the list price, the discount being offered, the unit cost and the number of units — and works through the chain in the order it actually happens: the net sale price, the total revenue at that price, the total cost of the goods, the gross profit left between them, and finally the two percentages that describe the same profit against two different denominators. Margin is the profit against what the customer paid; markup is the profit against what the goods cost you. Both are printed, side by side, because they are different numbers and confusing one for the other is the most common pricing error there is.
One 100 list price discounted six ways, at a cost of 45
| Discount | Net sale price | Total revenue | Gross profit |
|---|---|---|---|
| 0 | 100 | 25000 | 13750 |
| 10 | 90 | 22500 | 11250 |
| 20 | 80 | 20000 | 8750 |
| 30 | 70 | 17500 | 6250 |
| 40 | 60 | 15000 | 3750 |
| 50 | 50 | 12500 | 1250 |
The axis is the discount because that is the decision being made; the list price, the unit cost and the quantity are all held at the calculator's defaults, so any row can be reproduced by matching the first column. The second column falls by ten for every ten points of discount and the third falls with it, but the fourth is where the arithmetic bites: the profit goes from 13,750 at no discount to 1,250 at fifty percent, which is a fall of 91 percent for a fall of half in the price. Read the first and last columns together and the reason is visible — the cost of 11,250 does not appear in the table and does not change, so every point of discount comes straight out of what is left above it. The last row is close to the point where the price meets the cost, and one more step past it turns the profit negative, which is the boundary this table was chosen to show rather than to cross.
Formula
Net sale price = list price × (100 − discount) ÷ 100; total revenue = net sale price × quantity; total cost = unit cost × quantity; gross profit = total revenue − total cost; profit margin = gross profit ÷ total revenue × 100; markup = gross profit ÷ total cost × 100
- List price
- The price before the discount: the sticker, the menu price, the published rate. Everything on the panel is built on it, so a list price that already has a discount folded into it will produce a second discount that nobody intended — enter the price the customer would pay with no deal at all.
- Discount
- What comes off the list price, as a percentage of it. It is not the same quantity as a markup and the two must not be swapped: twenty percent off the list price lowers the revenue by twenty percent of the list price, while a twenty percent markup raises the price by twenty percent of the cost, which is a smaller amount on the same transaction. The page refuses a discount of a hundred percent for an arithmetic reason rather than a commercial one — the net price becomes zero, and the margin's denominator goes with it.
- Unit cost
- What one unit costs you, whether that is what you paid for it or what it costs you to make it. It should include the costs that vary with each unit sold — materials, the fee the marketplace takes, the shipping you absorb — because a margin built on a partial cost is an optimistic one. It is the denominator of the markup, and the figure that decides whether a discount still leaves anything behind.
- Quantity
- How many units are sold at this price on this deal. It scales the revenue and the cost together, so it does not change the per-unit profit or either percentage — which is worth knowing, since it means a discount that destroys the margin on one unit destroys it on a thousand as well, only more expensively.
- Net sale price
- The list price less the discount: what one unit actually sells for. It is the primary result on the panel because it is the number a customer would be quoted and the one every other figure is built from, and it is rounded to two decimals before anything downstream uses it so that the whole chain can be checked by hand.
- Total revenue
- The net sale price multiplied by the quantity: everything the deal brings in. It is a gross figure — the cost of the goods has not come off it yet — and it is the denominator of the margin, which is what makes the margin a statement about the sale rather than about the cost base.
- Total cost
- The unit cost multiplied by the quantity: what the goods on this deal cost you. It is the denominator of the markup, and the figure that has to be beaten for the sale to have produced anything at all.
- Gross profit
- Revenue minus cost, printed with its sign. It can be negative, and that is not a bug: discounting below cost is a real pricing decision, sometimes deliberate and sometimes not, and a page that refused to show the loss would hide exactly the case worth seeing. It is gross in the accounting sense — no overhead, no fixed costs, no tax.
- Profit margin
- Gross profit as a percentage of the revenue: how much of each unit of money taken in is kept. It is the figure to compare against other products, because it is normalised for price. It falls fast as a discount deepens — half the price is not half the margin, it is usually much less — and it can be negative when the discount goes under the cost.
- Markup
- Gross profit as a percentage of the cost of the goods: how much is added on top of what they cost you. It is the same profit as the margin against a different denominator, so it is always the larger of the two and it can exceed a hundred percent while the margin cannot. Quoting one as the other inflates or deflates the deal depending on which way the mistake goes.
Use it before setting a discount, to see whether the price you are about to offer still leaves a profit, and after a promotion, to find out what the discount actually cost you. It is also the page for costing a product from the other direction: put in the price you can sell at, the cost you have, and read the margin, then decide whether it is enough. The distinction to hold on to is between the two percentage outputs, since both are called a margin in ordinary speech. Margin measures the profit against the selling price and cannot reach a hundred percent; markup measures it against the cost and can be far above a hundred. A hundred percent markup is a margin of fifty percent, and a business that prices on one while reporting the other will believe it is making more than it is. The page shows both from one set of inputs so the gap between them is visible on the same screen, which is the only reliable way to stop them being confused. Note also that every output is downstream of the net sale price, which is rounded first, so the panel can be reproduced by hand from the printed price rather than from the unrounded one.
Worked examples
The default: 20 percent off a 100 list price, cost 45, 250 units
- Net sale price: 100 × (100 − 20) ÷ 100 = 80
- Total revenue: 80 × 250 = 20,000
- Total cost: 45 × 250 = 11,250
- Gross profit: 20,000 − 11,250 = 8,750
- Margin: 8,750 ÷ 20,000 × 100 = 43.75 percent; markup: 8,750 ÷ 11,250 × 100 = 77.78 percent
The last line is the point of the page. The same 8,750 is a margin of 43.75 percent and a markup of 77.78 percent, and both are true — they are answers to different questions. A seller who thinks in markup and reports in margin will understate the deal; one who does the reverse will overstate it, and the two figures sit next to each other here so the difference is impossible to miss.
No discount at all: the same deal at list price
- Net sale price: 100 × (100 − 0) ÷ 100 = 100
- Total revenue: 100 × 250 = 25,000
- Total cost: 45 × 250 = 11,250
- Gross profit: 25,000 − 11,250 = 13,750
- Margin: 13,750 ÷ 25,000 × 100 = 55 percent; markup: 13,750 ÷ 11,250 × 100 = 122.22 percent
Compare this with the default and the size of a twenty percent discount becomes clear: revenue falls by a fifth, and profit falls by 36 percent, from 13,750 to 8,750. A discount comes entirely out of the profit, because the cost does not move with it — which is why a discount that looks modest on the price tag is usually dramatic on the bottom line.
Half price: 50 percent off
- Net sale price: 100 × (100 − 50) ÷ 100 = 50
- Total revenue: 50 × 250 = 12,500
- Total cost: 45 × 250 = 11,250
- Gross profit: 12,500 − 11,250 = 1,250
- Margin: 1,250 ÷ 12,500 × 100 = 10 percent; markup: 1,250 ÷ 11,250 × 100 = 11.11 percent
Halving the price did not halve the profit; it took 91 percent of it, from 13,750 down to 1,250, because the cost stayed exactly where it was. This is the single most useful thing the page does: it shows that the discount comes out of the profit and not out of the price, and a discount deep enough to cross the cost leaves nothing at all.
The boundary: 55 percent off, where the unit profit is exactly zero
- Net sale price: 100 × (100 − 55) ÷ 100 = 45
- Total revenue: 45 × 250 = 11,250
- Total cost: 45 × 250 = 11,250
- Gross profit: 11,250 − 11,250 = 0
- Margin: 0 ÷ 11,250 × 100 = 0 percent; markup: 0 ÷ 11,250 × 100 = 0 percent
At a discount of 55 percent the selling price lands exactly on the cost, and every figure past that point is zero. One more point of discount would make the profit negative, which the page will print rather than object to. This is the arithmetic limit of discounting on this cost structure, and it does not depend on the quantity: the same 45 is the floor whether 25 units are sold or 250,000.
Awkward numbers: 33.33 percent off 100.01
- Net sale price: 100.01 × (100 − 33.33) ÷ 100 = 66.6767, printed as 66.68
- Total revenue: 66.68 × 250 = 16,670
- Total cost: 45 × 250 = 11,250
- Gross profit: 16,670 − 11,250 = 5,420
- Margin: 5,420 ÷ 16,670 × 100 = 32.514 percent, printed as 32.51; markup: 5,420 ÷ 11,250 × 100 = 48.18 percent
The revenue here is built on the rounded net price of 66.68, so one unit brings in 66.68 and two hundred and fifty bring in 16,670. Multiplying the unrounded 66.6767 by 250 would give 16,669.17, eighty-three cents less. The page takes the price the customer is actually charged as its starting point, which is why the rounding sits there and everything else follows from it.
Limitations
The gross profit on this page is not the money the business keeps. It is revenue minus the cost of the goods, and everything that does not vary with each unit sold sits outside it: rent, salaries, software, insurance, the fixed part of a lease, taxes, and the interest on anything borrowed to fund the stock. A product can show a healthy gross profit here and a business can still lose money selling it, and the page cannot tell the difference. The cost figure is taken as given too, so any part of it that was left out will inflate every result at once — the marketplace fee, the card processing, the returns that have to be absorbed and the shipping are the usual omissions. Nor does anything here account for volume effects: a discount that doubles the units sold can raise the total profit even as the per-unit margin falls, and this page holds the quantity fixed while the price moves, so it answers the margin question rather than the campaign question. Finally, the two percentages are both about this transaction. They say nothing about whether the price is competitive, what the customer would have paid, or what the discount cost in future pricing power, which are the parts of a discount decision that no arithmetic reaches.
Frequently asked questions
- Why does a 20 percent discount cut the profit by more than 20 percent?
- Because the discount comes off the price and the cost does not move with it. In the default example a fifth off the price takes the profit from 13,750 to 8,750 — a fall of 36 percent — and the deeper the discount the worse the ratio gets, because the cost is a floor that the price is approaching. This is why discounting is such an effective way to destroy a margin: the revenue falls in proportion, the profit falls much faster, and the percentage is the same whether you sell one unit or a million.
- What is the difference between margin and markup?
- The denominator. Margin divides the profit by the selling price; markup divides the same profit by the cost of the goods. So markup is always the larger of the two, and a hundred percent markup is a fifty percent margin. Both are printed here from one set of inputs, which is the only dependable way to keep them apart: a business that prices on a hundred percent markup and reports a hundred percent margin will believe it is making twice what it is.
- Can the discount be 100 percent?
- The field allows a value up to a hundred and the calculation refuses a hundred, which are two different things. At a hundred percent the net price is zero, the revenue is zero, and the margin has a denominator of zero, so there is no answer to give. A discount below a hundred but large enough to take the price under the cost is accepted and produces a negative profit, because that is a real thing businesses do and the panel should show the loss rather than argue with it.
- Should the cost include shipping and fees?
- The costs that vary with each unit sold should be in it, and shipping you pay and the fee a marketplace or a card processor takes are exactly that. Leaving them out inflates the gross profit by their amount on every unit, and the mistake is invisible in the results because nothing on the panel refers back to a cost schedule. What does not belong here is the fixed cost of running the business — rent, salaries, subscriptions — because those do not change with the units on this deal and adding them would turn a gross profit into something closer to a net one without the rest of the net calculation being present.
- Does the quantity affect the percentages?
- No. The quantity scales the revenue and the cost by the same factor, so the per-unit profit, the margin and the markup are all unchanged by it; only the totals move. That is worth knowing for two reasons. It means a discount that destroys the margin on one sale destroys it on every sale, so volume cannot rescue a bad price. And it means you can work out the per-unit economics from a single unit, which is usually easier to reason about than a whole campaign.
- How does this differ from the revenue calculator?
- The revenue page has no discount and no cost, and stops at the money coming in; this page applies a discount and takes the cost off as well. They are the two halves of one measurement — gross revenue on one side, what is left after the discount and the cost on the other — and for a sale at list price with no discount the revenue figure of the two agrees exactly. If the sale was discounted, this is the page that produces the revenue you actually received.
References
- Revenue — the glossary definition of the total amount taken in from selling goods and services, which is what the discounted price produces before any cost is deducted — Investor.gov, U.S. Securities and Exchange Commission (United States)
- Profit — the glossary definition of revenue minus cost, which is the gross profit this page calculates and the reason a discount comes out of the profit rather than out of the cost — Investor.gov, U.S. Securities and Exchange Commission (United States)
- 明码标价和禁止价格欺诈规定 (SAIC Order No. 56, 2022) — the rules on how prices and discounts must be marked and advertised in China, including the requirement that a discounted price be shown against a genuine reference price — State Administration for Market Regulation of the People's Republic of China (China)