How to Calculate a Discount
A discount reduces the original price by a percentage. To find the sale price, multiply the original price by (1 − discount rate). For example, a $80 item with 25% off: $80 × (1 − 0.25) = $80 × 0.75 = $60.
Total savings is the difference between original and discounted price. The effective discount percentage is the actual savings divided by original price.
Discount Formula
How Stacked Discounts Work
Stacked discounts are applied one after the other, NOT added together. If you have a 20% coupon and an additional 10% loyalty discount, the effective discount is (1 − 0.20) × (1 − 0.10) = 0.72, meaning you pay 72% of the original — a 28% discount, not 30%.
This is why clearance sales often say "extra 20% off sale price" rather than "40% off." The math is sequential, and the effective total discount is always less than the sum.
Common Discount Strategies in Ecommerce
- Percentage off: Most common (20% off, Black Friday 50% off). Simple and clear to customers.
- Buy X Get Y: Encourages higher basket values. Effective discount depends on basket mix.
- Volume discounts: Extra 10% when ordering 10+ units. Great for B2B and wholesale.
- Loyalty stacking: Loyalty reward code + seasonal sale. Always stack correctly in this calculator.
- Flash sales: Short-duration deep discounts. Use this calculator to check margin viability before launching.