promo hangover

The promo week looked great. Now count the weeks after it. Find out whether the discount really made money.

Normal weekly units (before the promo) Regular price $ Unit cost $ Discount % Promo length (weeks) Weekly units during the promo Weeks of dip afterwards Weekly units during the dip

Take normal weekly units from the weeks before the promo, and dip units from the weeks after it. Unit cost is everything it costs to sell one more unit: product, shipping, fees and returns. Price after the promo is assumed to go back to regular.

verdict

Net profit change

Promo window plus the dip, against selling normally.

During the promo

The dip afterwards

Extra sales borrowed from later

Uplift needed to break even

Discount given to people who would have bought anyway

Normal units sold at the lower price.

If the dip is deeper or shallower

Dip depth (below normal)	Dip units a week	Dip cost	Net profit change

Uses your dip length. Depth zero means no dip at all.

How much uplift each discount needs

Discount	Margin per unit	Uplift to break even in the promo	Uplift to also cover your dip

Uplift is promo weekly units over normal weekly units. A bigger discount shrinks the margin on every unit, including the ones you would have sold anyway.

How it works

The arithmetic

margin now m = price - cost margin on promo mp = price x (1 - discount) - cost promo window = promo units x weeks x mp - normal units x weeks x m dip cost = (normal units - dip units) x dip weeks x m net = promo window - dip cost uplift to break even in the promo = m / mp - 1 borrowed share = dip units lost / extra units sold in the promo

The break-even uplift in the promo does not depend on volume: it is the margin before the discount over the margin after it, minus one. A 15% discount on a 40% margin needs about 60% more units just to stand still.

The verdict

pays: the promo window and the dip together leave you better off. the dip eats it: the promo window made money, but the dip took it back. loses money: the promo window itself lost money, before any dip.

Read this before you plan the next promo

The numbers are only as good as your baseline. Seasonality, weather, stock-outs and other marketing in the same weeks all move units. Compare against a control group or the same weeks last year if you can.

The dip is not guaranteed. Products that cannot be stockpiled may show little or none. This tool does not assume a typical dip: you enter the one you measured.

It counts one promotion's profit. It does not count customers you gained and kept, a price you taught people to wait for, or a competitor's response.

Units sold below cost always lose money. If the discounted price is below unit cost, no amount of uplift fixes it.