Discounts come out of contribution first
If your direct costs stay constant, every pound removed from selling price removes a pound from gross profit. That is why the percentage drop in profit can exceed the headline discount.
Measure the sales lift required
Compare profit per sale before and after the discount. Dividing the old profit by the new profit shows how much additional volume is required to earn the same total gross profit.
Use discounts deliberately
A discount can still be sensible when it clears stock, brings repeat customers or improves utilisation. The key is knowing the economic trade-off before launching it.
ProfitMaths guides provide general educational information, not personalised accounting, tax, legal or financial advice.