Is Your Promo Profitable? How to Calculate It

You can work out how much orders must grow after a promo with one formula: new number of orders = old number × margin ÷ (margin − discount). If the margin is 30% and the discount is 20%, orders must grow 3 times to keep the profit.

When sales drop, we run a promo and sales rise. But the question is: did it bring profit, or did it lose money? Many owners can't answer this exactly: "sales went up" is visible, "profit disappeared" is not. Below we show it with simple arithmetic.

Key points:

• A discount cuts the profit of an order noticeably, because cost does not change.
• The smaller the margin, the riskier the discount.
• Before the promo, calculate how much orders must grow.

Why is more sales not more profit?

Because a discount lowers the price while cost stays the same. Dish, packaging and courier costs remain the same regardless of the discount. So if the price falls 20%, profit falls far more than 20%.

Don't mix up sales and profit. Sales are turnover, profit is the money left after costs. A promo can raise turnover and cut profit at the same time.

Example: a 20% discount

Suppose one order is 80,000 UZS and its cost (dish, packaging, delivery) is 56,000 UZS. Profit per order is 24,000 UZS (30% margin). With 100 orders per day, daily profit is 2.4 million UZS. Now we give a 20% discount.

Profit per order fell from 24,000 to 8,000. To keep daily profit at 2.4 million UZS, orders must grow from 100 to 300, which is 3 times. If they don't, the promo lost money. These are example numbers, so plug in your own price and cost.

How do you apply the formula to your case?

The formula: how many times orders must grow = margin ÷ (margin − discount). Margin and discount are taken as a percentage of the price. With a 30% margin and a 10% discount, orders must grow 1.5 times (30 ÷ 20). If the discount reaches the margin or exceeds it, every order earns nothing or loses money.

That is why you shouldn't give a big discount on a low-margin dish. It is better to run promos on high-profit dishes (for example group A in ABC-XYZ analysis). To count the margin correctly, take the full delivery cost: packaging and delivery count too.

How do you measure the result of a promo?

Compare five things: orders during the promo and before it, average check, profit, the share of new and repeat customers, and the next week's sales. The last is important: sometimes a promo pulls orders forward, and sales drop after it.

Give each promo its own promo code: then you see how many orders came from that exact promo. In Delever, promo codes, promos, push and the referral program are managed in the marketing module (520,000 UZS per month), and you track the result on the dashboard: about the morning report.

What is an alternative to a discount?

You don't always have to lower the price. A combo set (raises the average check), a bonus on an extra, cashback on the second order or free delivery are often more profitable, because you control part of the cost. The loyalty program explains these options.

Conclusion

• Before a promo, calculate the margin and how much orders must grow.
• Run promos on profitable dishes, not low-margin ones.
• Give each promo a promo code and check profit after the result.

We show promo effectiveness on your own data: delever.io or @delever_bot on Telegram.