Free gift vs discount calculator
Both offers push customers to spend more. Compare a free gift and a percentage discount at the same threshold and see which one keeps more profit.
Example numbers. Replace them with yours.
- Keeps more profit
- Free gift
- Profit with the free gift
- USD 4,000
- Profit with the discount
- USD 1,500
- Difference per month
- USD 2,500
- AOV jump needed
- 36.4%
What it calculates
A threshold offer earns extra margin on the bigger baskets it creates. A free gift costs you the gift's product cost on each order. A discount costs a share of the whole order. When the gift costs less than the discount amount, it keeps more profit for the same push.
How to read the result
This assumes every order moves up to the threshold, so read it as a best case for both offers. A gift people value more than it costs you is usually the stronger offer.
Learn the metric:AOVGross margin
The formula
Extra profit = (Threshold − AOV) × orders × margin With gift = Extra profit − gift cost × orders With discount = Extra profit − threshold × discount × orders
Worked example
Example inputs
- Current AOV
- USD 55
- Order threshold
- USD 75
- Orders per month
- 1,000
- Margin
- 45%
- Gift cost
- USD 5
- Discount at the threshold
- 10%
Results
- Keeps more profit
- Free gift
- Profit with the free gift
- USD 4,000
- Profit with the discount
- USD 1,500
- Difference per month
- USD 2,500
- AOV jump needed
- 36.4%
What changes the result
Gift cost at five values. Every other input stays as in the worked example; the highlighted row is the example.
| Gift cost | Keeps more profit | Profit with the free gift |
|---|---|---|
| USD 2.50 | Free gift | USD 6,500 |
| USD 5 | Free gift | USD 4,000 |
| USD 7.50 | Free gift | USD 1,500 |
| USD 10 | Discount | -USD 1,000 |
| USD 15 | Discount | -USD 6,000 |
Use your real numbers
Analify reads order values, product costs and discount codes from Shopify, so you can compare offer periods in Blended Profit.
Analify already reads 4 of these 6 inputs live, from Shopify
Start freeQuestions
Is a free gift better than a discount?
When the gift costs you less than the discount amount, yes. It pushes the same basket and keeps more margin.
What makes a good free gift?
Something customers value above what it costs you, that matches the products they already buy.
Why is this a best case?
It assumes every order reaches the threshold. In practice only some do, so both results will be smaller.
Do you store what I enter?
No. The calculation runs in your browser and nothing is sent to Analify.
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