Discount Table
Discount Table Explained:
(a) What is this? This table explains the impact of a price discount on margins.
(b) What does this tell me? This table demonstrates the impact of discount on volume. The discount you are applying is on the left hand column. The GP% you are aiming to maintain for the product or category is across the top of the table. For example, if you are trying to maintain a 30% GP and you discount the price by 20%, you will need to sell 200% more volume to maintain the same $ profit.
(c) Why should I use it? To highlight the impact of price discounting on business, category or product profitability. It also highlights the impact of poor buying decisions. In addition it illustrates the folly of taking "deals" that do not sell through.
(d) Caution: This table does not mean you should cease discounting products. It simply illustrates the impact of reduced margins. It is extremely rate to find a retailer who does not discount products, but you should be aware of the impact. Use the Average Weighted Margin calculator to see the overall impact of dicounting.
| Discount % | GP % | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 20% | 25% | 30% | 35% | 40% | 45% | 50% | 55% | 60% | |
| 2% | 11% | 9% | 7% | 6% | 5% | 5% | 4% | 4% | 4% |
| 4% | 25% | 19% | 15% | 13% | 11% | 10% | 9% | 8% | 7% |
| 6% | 43% | 43% | 25% | 21% | 18% | 15% | 14% | 12% | 11% |
| 8% | 67% | 47% | 36% | 30% | 25% | 22% | 19% | 17% | 15% |
| 10% | 100% | 67% | 50% | 40% | 33% | 29% | 25% | 22% | 20% |
| 12% | 150% | 92% | 67% | 52% | 43% | 36% | 32% | 28% | 25% |
| 14% | 233% | 127% | 88% | 67% | 54% | 45% | 39% | 34% | 30% |
| 16% | 400% | 178% | 114% | 84% | 67% | 55% | 47% | 41% | 36% |
| 18% | 900% | 257% | 150% | 106% | 82% | 67% | 56% | 49% | 43% |
| 20% | * | 400% | 200% | 133% | 100% | 80% | 67% | 57% | 50% |
| 25% | * | * | 500% | 250% | 167% | 125% | 100% | 83% | 71% |
| 30% | * | * | * | 600% | 300% | 200% | 150% | 120% | 100% |