Discount Campaign Cost Sheet: How Many Extra Sales Do You Need?

This cost sheet is for a short product promotion with a defined start, end and stock allocation. Use it to find the sales target, then check whether there is enough demand to reach it.

Establish the no-promotion baseline

Take an ordinary comparable period and estimate what it would produce without the offer. Avoid using a quiet week as the baseline for a promotion timed to your busiest weekend. Separate genuinely additional sales from purchases that regular customers would have made anyway.

In our fictional example the normal price is $80, goods cost $40, fulfilment costs $5 per unit and the payment fee is 2% of the selling price. Normal contribution is $80 − $40 − $5 − $1.60 = $33.40. At 100 units, the period would contribute $3,340 before fixed overheads.

Calculate the target at each discount

Use this calculation: required units = (baseline contribution + campaign cost) ÷ discounted contribution per unit. If contribution per unit is zero or negative, more sales cannot recover the campaign cost under those assumptions.

Assumptions: Fictional Australian-dollar management-costing example. Amounts exclude GST that is assumed recoverable; any non-recoverable tax is already included in costs. These assumptions do not establish your GST entitlement. Contribution is before unallocated overheads and income tax.

Discount	Selling price	Contribution per unit	Units needed	Extra units	Within 180-unit capacity?
None; no campaign	$80	$33.40	100	0	Yes
10%	$72	$25.56	143	43	Yes
20%	$64	$17.72	206	106	No
30%	$56	$9.88	369	269	No

Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.

For the 10% discount, the fee becomes $1.44 and contribution becomes $25.56. You need ($3,340 + $300) ÷ $25.56 = 142.41 units, rounded up to 143. The campaign then contributes $3,355.08 after its $300 cost, slightly above the $3,340 baseline.

The 20% offer needs 206 units and the 30% offer needs 369. If this period can handle only 180 orders, both fail the capacity test before you spend anything on advertising. Check that limit before choosing the discount.

Include the costs that change when volume rises

The table assumes one item per order, no returns and unchanged goods and fulfilment costs. Replace those assumptions before relying on it. Add temporary labour, packaging, extra dispatch runs, marketplace fees and any expected return loss. A fixed extra delivery run belongs in campaign cost; a charge on every order belongs in unit cost.

If expected return losses add $2 per sale to the 10% offer, contribution falls to $23.56 and the target rises to 155 units. Don't subtract the full product cost again where returned goods can be resold; estimate the actual net loss from refunds, unrecovered fees, handling and damaged stock.

Separate stock clearance from normal profit preservation. You might accept a lower result to release cash from slow stock, but write that objective down and compare the alternatives. A lower purchase cost paid months ago does not make a promotion's current cash receipts equal profit.

Set the stop rule before launch

Record the campaign budget, required units, maximum affordable loss, stock limit and review time. For example, review after the first dispatch day when you have actual conversion and fulfilment data. Don't keep extending an offer because a sales chart looks busy.

Business Queensland's promotion calculator also compares promotion results with normal pricing. Use actual contribution after the campaign to check the assumptions you will reuse next time.

Before advertising savings, check the ACCC's guidance on price comparisons. A worksheet's normal-price assumption isn't evidence of a genuine previous selling price.

Where to get help

Use break-even analysis for the business-wide target and volume-tier testing for ongoing quantity discounts. If delivery is part of the offer, test the free-shipping threshold. The pricing and profit hub has the full sequence.