business-and-commerce calculator
Margin Discount Calculator
Find the maximum discount that preserves a target gross margin from unit cost and list price.
Margin Discount Calculator
Maximum discount
Enter cost, list price, and target gross margin.
Excludes taxes, fees, overhead, returns, and other expenses.
Formula version 1.0.0
How to use this calculator
- Enter unit cost and list price in the same currency.
- Enter the target gross margin percentage.
- Calculate the minimum selling price required by that margin.
- Use the maximum discount only when the result is marked feasible.
Symbols and units
| Symbol | Meaning | Unit or domain |
|---|---|---|
C | Unit cost | currency |
L | List price | currency |
m | Target gross margin | decimal |
S | Required selling price | currency |
d | Maximum list-price discount | % |
Checked examples
Feasible discount
Inputs: Cost 40, list 100, target margin 20%
Calculation: S=40÷(1−0.20)=50; d=(100−50)÷100×100
Result: Maximum discount 50%
Selling at 50 retains a 20 percent gross margin.
Check: margin-discount.test.ts
List price already too low
Inputs: Cost 80, list 100, target margin 30%
Calculation: Required price=80÷0.70≈114.29
Result: 0% discount; infeasible
Even full list price is below the target-margin price.
Check: margin-discount.test.ts
Assumptions, rounding, and limits
- Cost and price use the same currency and per-unit basis.
- Gross margin is calculated on selling price, not cost markup.
- Target margin is below 100 percent.
- Taxes, fees, demand, overhead allocation, and legal pricing rules are excluded.
Frequently asked questions
Is margin the same as markup?
No. Margin divides profit by selling price; markup divides profit by cost.
Why can the result be infeasible?
The list price may already be below the selling price required for the target margin.
Does this include tax or platform fees?
No. Include relevant costs in your cost basis or perform a fuller pricing analysis.
Sources and review
- OpenStax: Forms of Brand Development, Brand Loyalty, and Brand Metrics — Gross margin metric
- U.S. Small Business Administration: Break-even point — Cost and contribution concepts
- Formula version
- margin.discount@1.0.0
- Formula review
- Equatara formula review
- Editorial review
- Equatara editorial review
- Last verified
- 2026-10-25
- Applicability
- Unit-level gross-margin ceiling; excludes taxes, fees, and policy constraints.
- Next review
- On material formula/source change, or by 2028-10-25.
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Found a problem?
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