Does your volume discount actually make money?
A volume discount looks like free growth: the shopper buys more, you make more. But a discount comes out of your margin, and whether the bundle still pays depends on numbers only you have. This works them out.
The trick that makes bundles profitable is not the discount, it is the shipping. You pay to ship one parcel whether it holds one unit or three, so every extra unit in the box carries no extra shipping cost. That saved shipping is usually worth more than a sensible discount gives away. Push the discount too far, though, and the bundle earns you less than a single sale. The calculator shows you exactly where that line is for your product.
Your product
Your volume discounts
The discount applies to the whole order, the way “buy 2, save 10%” normally does. You can build all of these in Bundles & Upsell, which runs up to four tiers: Buy 1 plus three discounts.
| Per order | Buy 1 | Buy 2save 10% | Buy 3save 20% |
|---|---|---|---|
| Customer pays | $45.00 | $81.00 | $108.00 |
| Cost of goods | -$18.00 | -$36.00 | -$54.00 |
| Shipping | -$6.00 | -$6.00 | -$6.00 |
| Your profit | $21.00 | $39.00 | $48.00 |
| Profit per unit | $21.00 | $19.50 | $16.00 |
| Margin | 46.7% | 48.1% | 44.4% |
| vs a single unit | base | +$18.00 | +$27.00 |
Every tier earns you more per order than a single unit.
Your biggest tier makes $48.00 per order against $21.00 for a single unit, because the extra units ship in the same parcel. That gap is what the discount buys, if it is what made the shopper size up.
This prices the bundle as if the shopper takes it. It cannot tell you whether the discount created the bigger order or just gave away margin on units they would have bought anyway. And it assumes one parcel per order: if a three-unit box costs you more to post, raise the shipping figure for that tier in your head.
Set these exact tiers up in Bundles & Upsell
Once the numbers work here, you can build the same volume-discount tiers in Libautech Bundles & Upsell without touching code: pick the product, set Buy 1 plus up to three discount tiers, and publish. It also does bundles, BOGO, product add-ons and five more offer types from the same app.
How to read it
Profit per order is the number that matters most. If a tier earns more than a single unit, the bundle is working for you. The vs a single unit row makes that comparison directly, and it turns red when a tier earns less than selling one unit on its own, which means the discount is too deep.
Margin always falls as the discount rises, and that is fine: a smaller slice of a bigger order can still be more money. Watch the profit, not the margin percentage.
The one thing this cannot tell you
It prices the bundle assuming the shopper takes it. It cannot know whether your discount caused the larger order or simply handed money back on units the shopper would have bought anyway. Use it to be sure each tier is profitable when taken, then turn the offer on and watch whether your average order value actually rises. If it does, the discount is doing its job. If it does not, you are discounting orders you already had.
Frequently asked
- How is the profit worked out?
- For each tier: revenue is the units times your price times (1 minus the discount), because a volume discount applies to the whole order. Cost of goods is the units times your unit cost. Shipping is one parcel per order. Profit is revenue minus cost of goods minus shipping. Every figure is arithmetic on the numbers you enter, nothing is estimated.
- Why does a bigger bundle often make more profit even with a discount?
- Because shipping is charged once per order, not once per unit. Two units go in the same parcel, so the second unit carries no extra shipping cost. That saved shipping is usually worth more than the discount gives away, which is why the bundle can be more profitable per order than a single sale even after the markdown.
- When does a volume discount lose money?
- When the discount is deep enough that the whole order earns less than a single unit would. The calculator flags this in red. It happens when the markdown wipes out both the shared-shipping saving and part of your base margin, which is easy to do accidentally with a 'buy 3, save 40%' style offer on a thin-margin product.
- Does this tell me if the discount is worth running?
- Not on its own. It prices the bundle as if the shopper takes it, but it cannot know whether the discount created the larger order or simply gave away margin on units they would have bought anyway. That is a behavioural question. Use the calculator to make sure the tier is profitable when taken, then watch whether your average order value actually rises after you turn it on.