Why a 20% discount can halve your profit
The discount comes straight out of your profit, not out of your costs. If you make $15 on a $30 item, a 20% discount ($6) leaves $9, a 40% drop in profit. You would need about two-thirds more sales just to stay where you were.
Sale price = price × (1 − discount)
Extra sales needed = profit before ÷ profit after − 1
Extra sales needed = profit before ÷ profit after − 1
Smarter alternatives
- Offer free shipping over a minimum order instead of a percentage off.
- Discount bundles, which raise the order value.
- Keep the discount for returning customers or a short sale period.
Check the new margin with the profit margin calculator, and if you sell on Etsy, run the sale price through the Etsy fee calculator, because fees are charged on the discounted price.
Frequently asked questions
Does Etsy charge fees on the discounted price?
Yes. Etsy's percentage fees are charged on what the buyer actually pays, so a discount lowers the fees a little too.
Is a discount ever worth it?
Yes, if it brings enough extra sales or new customers who buy again. The calculator tells you the extra sales you need; decide if that is realistic.
Last reviewed: November 2026 · By Muhammad Shujah