The break-even formula
Fee rate = (1 − BNPL share) × card fee % + BNPL share × BNPL fee % Profit per unit = price − unit cost − other costs − price × fee rate − fixed fee Break-even units = current units × full-price profit per unit ÷ discounted profit per unit Volume lift needed = break-even units ÷ current units − 1
Example with no fees: list price $100, unit cost $50, 100 units. At 20% off each unit earns $30 instead of $50, so you need 100 × 50 ÷ 30 = 166.7 units: 67 more units, a 66.7% lift. At 25% off you need twice the volume (+100%), and at 30% off, two and a half times (+150%).
Selling across several products? The Holiday Margin Planner does this for up to 50 products at once. For one product's price and fees, use the Shopify profit margin calculator.
Questions
How much more do I need to sell at a discount?
Break-even units = units at full price × profit per unit at full price ÷ profit per unit at the discount. With a 50% margin and no fees, 20% off needs 66.7% more units just to earn the same profit.
Why does a small discount need so many more sales?
The discount comes straight out of your profit, not your price. On a $100 item with $50 of cost, 20% off cuts profit per unit from $50 to $30, so you must sell 5 units for every 3 you sold before.
What does buy now, pay later cost a merchant?
BNPL providers usually charge merchants a higher fee than cards, often around 4% to 6% of the order. That figure here is an estimate you can edit; use the rate in your own agreement.
When does a discount lose money on every sale?
When the discounted price is below product cost plus fees and other per-unit costs. Then no amount of extra volume helps, and the calculator says so.