Discount Rate Calculation
The discount rate is the ratio of the difference between the old and new price to the old price. When you enter the two prices, this tool shows the discount amount and percentage.
Calculating…
Calculation formula
Discount rate (%) = (Discount amount ÷ Old price) × 100
How to interpret it?
The discount rate is always calculated against the old price. This is the source of the most common mistake in campaign communication: because a rate calculated against the new price comes out higher, it is misleading.
When making a discount decision, you must separately calculate the discount's effect on profit. A 20% discount on a product with a 25% profit margin takes most of your profit. You must know your break-even price before discounting.
Limitations: what does this tool not calculate?
It does not show the profit effect. To see the discount's effect on your margin, you need to calculate the cost side separately.
Shipping and campaign share are not included. The total amount the customer pays may differ.
Platform rules are separate. Marketplaces' discount display and reference price rules may differ.
Frequently asked questions
How is the discount rate calculated?
The new price is subtracted from the old price, the result is divided by the old price, and multiplied by 100.
What is the rate calculated against?
Always the old price. Calculating against the new price is misleading and gives a higher rate.
How much does a discount reduce my profit?
It depends on your profit margin. When working at a 25% margin, a 20% discount takes most of your profit.
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Last updated: September 10, 2026