What does a discount really cost you?
More than the percentage suggests. If you take 20% off a product with a 50% margin, you don't lose a fifth of your profit on it: you lose 40%. To make the same profit as before, you have to sell more:
Extra sales needed = discount ÷ (margin − discount)
With a 50% margin and 20% off, that's 20 ÷ (50 − 20) = 0.67, so 67% more orders just to stand still. The accounting firm Moore Markhams gives the same sum with a 40% margin: 10% off needs a third more sales.
| Your margin | 10% off | 20% off | 30% off |
|---|---|---|---|
| 30% | +50% | +200% | every sale loses money |
| 40% | +33% | +100% | +300% |
| 50% | +25% | +67% | +150% |
| 60% | +20% | +50% | +100% |
The margin here is what you keep from the price after the cost of the product. Payment fees and delivery come off on top, so the real numbers are a little worse.
For comparison, Adobe measured the deepest US online discounts of the 2025 holiday season at around 31% for electronics, 30% for toys and 25% for clothing. Matching that on a 50% margin means selling two and a half times as much as usual, with the same small team packing the parcels.
Small shops are opting out
You wouldn't be alone in choosing not to compete on price. In a 2025 survey by the British Independent Retailers Association, about three in four independent shops said they wouldn't take part in Black Friday, up from about seven in ten the year before. The most common reasons were margins that are already thin, and customers who learn to wait for the sale.
Some well-known brands went further. Patagonia ran its "Don't Buy This Jacket" ad on Black Friday 2011. Deciem, the company behind The Ordinary, offered 23% off for the whole of November 2019 and then closed its website and shops on Black Friday itself. You don't have to make a statement. But it helps to know that skipping the race to the bottom is a normal choice.
Offers that cost less than a discount
1. Free delivery above an amount
Unexpected extra costs, such as delivery, are the most common reason people abandon a checkout: 40% of the shoppers Baymard Institute asked gave it as a reason. In a 2025 Ryder survey of US online shoppers, free shipping was the top reason to buy during the holidays (76%), ahead of sales and discounts (64%).
Set the amount a little above your usual order value, so people add one more thing. In Shopify, a free shipping discount can require a minimum order amount and can be limited to the countries you choose.
2. A gift with the order
A small product, a sample or a gift wrap for orders above an amount. It costs you the price you paid for it, not the price on your site. In Shopify this is a Buy X get Y discount with the "gets" item set to free. Note that the customer has to add the free item to their cart themselves, so say so clearly on the product page and in the cart.
3. A bundle
Put together products that are often bought together, such as a lamp with a bulb or a set of three, at a price that's attractive but still earns you more per order. Shopify's free Bundles app handles fixed bundles. A bundle price doesn't update when you change the price of a product in it, so check them before the sale.
4. Early access instead of a deeper discount
People who sign up get the offer a day or two before everyone else. It rewards your most interested customers with first pick of the stock, and it spreads your orders over more days. Our 5-week Black Friday plan shows when to open it.
5. Credit for a later order
"Order now and get €10 to spend in January." It brings the customer back at a quiet time of year, and you only give the credit away when they buy again.
6. Longer returns for gifts
Gifts bought in November can be returned until mid-January, for example. It answers a real worry for people buying for someone else, and costs you nothing unless something comes back.
7. Something only available now
A limited colour, a seasonal set or a small batch. It gives people a reason to buy now without changing the price of anything else.
8. A real discount, on a few products
If you do want to take money off, choose the products where your margin can take it, or stock you want to clear, and leave the rest at full price. Work the percentage out from the lowest price of the last 30 days; our article on the EU 30-day price rule shows how.
A worked example
Take a shop whose average order is €60, with a 50% margin and €6 of delivery that the customer usually pays.
- 20% off everything: on a €60 order you give away €12, and keep €18 instead of €30.
- Free delivery above €75: a customer who adds one more product to reach €75 earns you €37.50 in margin. You pay the €6 delivery, and keep €31.50.
These are illustrations, not results: how many people add the extra item depends on your products and your customers. But the second offer can lose you sales and still leave you better off, while the first only works if a lot more people buy.
What does the EU's 30-day rule say about these offers?
The EU rule on "was" prices covers announced price reductions: a percentage off, a crossed-out price, and wording like "Black Friday offers" that suggests prices have come down. The European Commission's guidance on that rule says:
- Conditional offers, such as "buy one, get two" or "30% off when you buy three", are outside the 30-day rule, but they still fall under the general ban on misleading commercial practices.
- Credit or points for later purchases, and a voucher given after a purchase for the next one, are outside the rule too.
- A "personal" code that is in fact open to everyone is covered.
The guidance doesn't name free gifts, free delivery or bundles. They look most like the conditional offers it describes, but that's our reading, not the Commission's words. If you call them "Black Friday deals" in a way that suggests your prices have come down, the 30-day rule can apply again. This is a plain-language summary, not legal advice.
When a discount is the right choice
A price cut makes sense when you need to clear stock before it dates, when a product has a high margin, or when your shoppers compare exact prices across shops for the same item. In those cases, discount a few products honestly and keep the rest of the shop at full price.
Where Signal fits
A sitewide pop-up shows the same discount to everyone, including people who were going to buy anyway. Signal shows offers to the visitors they fit: gift ideas to someone who says it's a present, the delivery dates to someone who asks when it will arrive, a bundle to someone looking at the products in it. It can ask one short question, such as "Is it a gift?", when the answer would change what to show. See how it works; plans start at €39 a month.
