Pyalm Books
By Fadhil Abdulla

How to Calculate a Discount (and Work Backwards from the Sale Price)

Percentage-off maths is simple until you need the original price from a discounted one. Here's both directions, with examples retailers can use today.

Forward: price to sale price

To apply a discount, multiply the original price by the discount percentage and subtract. Discount amount = original price × discount % ÷ 100. A AED 200 item at 15% off saves AED 30, giving a AED 170 sale price. The free Discount Calculator shows the amount, the final price, and the saving instantly.

Backwards: sale price to original price

This is where mistakes happen. To recover the original price from a discounted one, divide by (1 − discount/100). For 20% off, divide the sale price by 0.8 — you do not add 20% back.

Watch your margins

Discounts come straight off your contribution margin. A 20% discount on a product with a 40% margin wipes out half your profit on that sale. Before running a promotion, check what the discount does to profitability with the Profit Margin Calculator.

Keep promotions under control

  • Decide the maximum discount your margin can absorb.
  • Prefer time-boxed offers over permanent price cuts.
  • Track the net effect on revenue, not just units sold.

Use the free Discount Calculator | Try the Profit Margin Calculator

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