Running a Black Friday sale? Calculate exactly how many extra units you must sell just to break even on the profit margin you destroyed by discounting.
Required Sales Uplift
When you offer a 20% discount on a product, you are not losing 20% of your profit. You are losing 20% of your gross revenue, which drops straight down to your bottom line, destroying a massive percentage of your net profit.
For example: If you sell a $100 item and your costs (COGS, Shipping, Ads, Fees) equal $70, your net profit is $30.
If you offer a 20% discount, the new price is $80. Your fixed costs are still $70. Your new profit is just $10.
A 20% discount just destroyed 66% of your net profit!
To make the same amount of money you were making before, you now have to sell exactly 300% MORE units. If your Black Friday sale doesn't increase your sales volume by at least 300%, you literally lost money by running the sale.
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