Discount depth is the size of a discount relative to the normal price. As depth increases, unit sales rise but unit contribution margin falls; past a certain point the extra units no longer cover the margin given away. The right depth is found by calculating how much additional volume is needed to make up that margin. Depth set without the calculation raises revenue while lowering profit.
The right question when planning a campaign is this: at this depth, how many times more do we have to sell to produce the same profit. On thin-margin products that multiplier climbs to unreachable levels fast. In marketplace campaigns, who bears the discount and whether commission is calculated on the discounted or the undiscounted price also need checking. A deep discount carries a second, delayed cost: it pulls the reference price down and makes the following period's full-price selling harder.
Break-even volume multiplier = Current contribution margin ÷ (Current contribution margin − Discount amount)
On a product with 100 TL of contribution margin, a 30 TL discount requires sales to rise roughly 1.43x to produce the same profit.
The right question when planning a campaign is this: at this depth, how many times more do we have to sell to produce the same profit. On thin-margin products that multiplier climbs to unreachable levels fast. In marketplace campaigns, who bears the discount and whether commission is calculated on the discounted or the…
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