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← The Vault Guide · Profit

Offer Maths: Discounts vs Gifts

A discount feels generous to the customer and expensive to you. A gift with purchase often feels just as generous and costs a fraction. Here's the maths.

The example

A $75 bundle with $11 of product cost and $14 of postage, packing and fees makes $50 profit before ads.

OfferCost to youProfit per orderExtra orders needed to match no-offer profit
No offer$0$50.00n/a
25% off$18.75$31.25+60%
Free gift ($6 cost)$6.00$44.00+14%

When to use which

  • Gift with purchase: protecting price and margin, introducing a second product, peak season
  • Bundle pricing: lifting order value permanently
  • Discount: clearing stock, or a one-off moment when volume matters more than margin
  • Free shipping threshold: nudging single-item orders into two-item orders

Run your own numbers with the offer calculator.

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