A campaign can look strong on the sales dashboard while leaving the team doing more work for less. The discount changes the amount received, but it does not automatically reduce product costs, packaging or the work required to fulfil an order. Understand that relationship before announcing the promotion.
I would start by writing down the purpose of the action. Clearing stock, acquiring new buyers and increasing the period's contribution are different objectives. The analysis should let you check the chosen objective, without changing the criterion after seeing the result.
What remains from each sale after the discount?
Calculate the net revenue included per order and subtract the variable costs you associate with it. Compare the result under normal and promotional conditions. Identify what goes into the calculation: calling a figure margin or profit without explaining the costs included can lead to different decisions based on the same data.
Let us use an entirely hypothetical example, with revenue excluding VAT to keep the comparison consistent. A product generates 100 euros in revenue and has 60 euros in variable costs before advertising. That leaves 40 euros to cover acquisition, fixed costs and other expenses.
A 20% discount reduces revenue to 80 euros. Assuming, only in this scenario, that those variable costs stay at 60 euros, 20 euros remain before advertising. Revenue per unit fell by one fifth, but the contribution calculated at this stage fell by half.
In a real store, some expenses may vary with price and others with the number of orders. Use actual costs and keep the same definition in both scenarios. The calculation is useful because it makes the promotion's effect visible, not because every product is assumed to have this structure.
To prepare your next step, explore Growing an online store.
How much additional volume offsets the reduction?
The required volume depends on the contribution each order leaves and the campaign's additional costs. A small reduction in revenue may require a substantial increase in units sold. Calculate that comparison point before launch and check whether the operation can deliver the volume you are assuming in your assessment of the promotion.
Continuing the hypothetical example, still excluding advertising, 100 units at the normal price leave 4000 euros in contribution at this stage. At 20 euros per promotional unit, you would need 200 units to reach the same 4000 euros. Doubling sales preserves that amount; it does not increase it.
Now add a hypothetical advertising cost of 10 euros per order in both scenarios. Contribution after advertising falls from 30 to 10 euros per unit. To match the 3000 euros left by 100 normal orders, you would need 300 promotional orders, with every assumption unchanged.
If you sell 150 units during the promotion, revenue excluding VAT will be 12,000 euros instead of the normal scenario's 10,000 euros. But contribution after advertising will be 1500 euros rather than 3000. In this example, 50% more units and 20% more revenue coexist with half the contribution.
These calculations help you understand a hypothesis; they are not a forecast for your store. To connect them with your regular analysis, consider the indicators showing whether the business is improving. Volume growth becomes meaningful when you know what changed in the other figures.
Which costs might increase during the campaign?
A promotion can put more pressure on preparation, shipping, support and returns, as well as advertising expenditure. Estimate those consequences using the available information and update the analysis when actual data arrives. The cost observed before the campaign may no longer represent the work required when order volume or composition changes.
A cheaper product may attract orders of a different value or change the combination of items purchased. If the store covers part of the shipping charge, that change may affect the amount available per order. Looking only at the average discount does not reveal the effect of the cart's composition.
You should also ask whether spare capacity exists or whether the volume requires additional work. Overtime, outsourced preparation or a new storage requirement may not appear in the initial calculation per unit. Record these costs at the appropriate level, without omitting them or counting them twice.
Acquisition cost deserves attention throughout the test. We held it constant in the earlier example to isolate the discount's effect, but a real campaign may change that cost. The question of increasing advertising without losing the financial benefit is complementary: price and acquisition affect the same available contribution.
Did the discount create purchases or bring them forward?
Compare the result with what would probably have happened without the promotion, recognising the limits of that comparison. Some orders may come from people who already intended to buy, while others may have been brought forward. Distinguishing those situations helps assess the campaign beyond the total recorded during the discounted period itself.
If you only examine the promotional period, you may miss a subsequent decline or the disappearance of normal-price sales. Follow a window that makes sense for the product's purchase cycle. No single duration answers the question well for every business or type of promotion.
Where it makes sense and is feasible, prepare a comparison between groups or periods that allows you to examine the chosen hypothesis. Record differences in demand, stock and spending that make interpretation harder. More sales during a period of higher demand do not, by themselves, prove that the discount created the increase.
The same care is useful when understanding which sales a campaign is helping. Attribution organises observed contacts, but does not replace an assessment of additional impact. Keep the orders associated with the action separate from the conclusion about what it actually changed.
How should you decide whether to repeat it?
Repeat the discount when the evidence answers the stated objective and the costs considered support the decision. If the intention was to clear stock or test an offer, assess that result explicitly. Avoid justifying lower contribution through future purchases you have not observed or benefits that you had not defined before launching the campaign.
It can make sense to accept a different immediate contribution to address a specific stock need. That requires comparing alternatives, such as keeping the product in storage or selling under different conditions. Explain the reason and the costs involved instead of treating any sales increase as an automatic success.
If the hypothesis depends on new buyers returning, follow that group over time. Separate what they have already purchased from the future value you still expect to receive. A projection can support planning, but it should not be recorded as realised contribution to make the campaign look better.
Close the analysis with revenue, costs included, contribution, capacity used and the comparison's limitations. Net profit requires considering the business's remaining costs and expenses; the figures in our example do not calculate it. This discipline lets you repeat a promotion for a verifiable reason and change the discount when the numbers no longer support it.