How the Black Friday profit calculator works
A Black Friday or Cyber Monday (BFCM) discount comes straight out of your margin, but most of your costs do not shrink with it. Product cost, shipping and the fixed part of your payment fee stay the same; only the percentage fees fall a little. This calculator shows what each discounted order really leaves you, the deepest discount you can offer before an order loses money, and how many extra orders a discount has to create before it beats selling at full price.
The formulas
Net revenue = Price paid ÷ (1 + VAT rate) (only if prices include VAT/GST)
Fees = Price paid × Fee % + Fixed fee
Profit per order = Net revenue × (1 − Returns %) − COGS − Shipping − Fees − Ad cost
Break-even discount = 1 − (COGS + Shipping + Fixed fee + Ad cost) ÷ [Regular price × ((1 − Returns %) ÷ (1 + VAT) − Fee %)]
Extra orders needed = Regular profit ÷ Discounted profit − 1
Why VAT and GST matter for UK, EU and Australian sellers
If you sell in the UK, EU or Australia, the price on your product page normally includes VAT or GST, and that tax is not yours to keep. When you cut a £60 price by 25% to £45 with 20% VAT, your own revenue falls from £50 to £37.50. That is the same 25% drop, but every one of your fixed costs is now a bigger share of a smaller number. US sellers usually quote prices without sales tax, so choose “No” and leave the rate at 0.
Worked example
A US store sells a product for $49.99. It costs $14 to make and $6 to ship. Payment fees are 2.9% + $0.30 and each order costs about $8 in ads. At full price the order makes about $20.24. With a 25% discount the customer pays $37.49, fees fall to about $1.39, and profit drops to about $8.11. That is 60% less profit per order, so the store needs about 2.5 times as many orders (150% more) just to earn the same total. The break-even discount is about 42%, and anything deeper loses money on every order.
How to choose a safer BFCM discount
- Start from the break-even discount and work back. Keep a buffer for returns, cost increases and ad costs that rise in late November.
- Plan for higher ad costs. Ad auctions get more crowded around Black Friday, so test a higher CPA in the calculator rather than reusing October's number.
- Use bundles or a threshold offer instead of a flat cut. A bigger order spreads the shipping and fixed fees, so “buy two, save 20%” is often worth more than 20% off one item.
- Check the extra orders you'd need. If a discount needs 150% more orders to break even, ask whether your traffic and stock can really deliver that.
- Count returns. Holiday orders often have longer return windows, so add a realistic allowance.
This is a planning model, not tax or accounting advice. It works one order at a time and leaves out fixed overhead, income tax and how a sale shifts orders between days.
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FAQ
What is a break-even discount?
It is the largest discount you can give before a single order makes zero profit after product cost, shipping, payment fees, ad cost and returns. A deeper discount loses money on every order.
Should UK and EU sellers include VAT?
Yes, if your displayed prices include VAT. Choose “Yes” and enter your VAT rate. The calculator removes the tax before working out your profit, because VAT is passed on to the tax authority.
Does this work for Cyber Monday and Boxing Day sales too?
Yes. The maths is the same for any percentage-off promotion: Black Friday, Cyber Monday, Boxing Day, Click Frenzy or end-of-season sales.
What fee should I use for Shopify or Stripe?
Use the rate on your own statement. For reference, Stripe's published standard US card rate is 2.9% + 30¢, and its UK standard card rate is 1.5% + 20p (checked 24 October 2026). Your platform plan or card mix may differ.
Why do I need so many extra orders?
A discount removes profit from every order, while costs like product, shipping and ads stay the same. If profit per order halves, you need twice as many orders just to earn the same total.