Discounted Price Settlement Calculator

Understanding the discounted price settlement — concept and principle

Marketplaces and platforms often let sellers offer an instant discount at checkout and then take a commission on what the customer pays. The seller receives the discounted price minus that commission, which is often a smaller amount than people expect. This calculator shows what the customer pays, what you receive after commission, and the list price that would give you the same payout as selling at the original price without a discount. It works with any currency.

How it is calculated

• Customer pays = list price × (1 − discount % ÷ 100)
• Seller receives = list price × (1 − discount % ÷ 100) × (1 − commission % ÷ 100)
• List price needed = list price ÷ (1 − discount % ÷ 100)

The calculator assumes the seller bears the whole discount and the commission is charged on the discounted price, which is common but not universal.

The principle

A discount and a commission are both percentages, and percentages taken one after another multiply rather than add. A 20% discount followed by an 11% commission leaves 0.80 × 0.89 = 71.2% of the list price, a total cut of 28.8%, not 31%. Commission is charged on the reduced price, so the platform's fee also falls when you discount. To get your old payout back, the discounted price must equal the old list price, so the new list price has to be the old one divided by (1 − discount).

Worked example

1. Inputs: list price $80, instant discount 20%, commission 11%.
2. Customer pays = 80 × 0.80 = $64.00.
3. Seller receives = 64 × 0.89 = $56.96.
4. Without the discount you would receive 80 × 0.89 = $71.20.
5. List price needed = 80 ÷ 0.80 = $100.00; 100 × 0.80 × 0.89 = $71.20.

How to read the result

The difference between $71.20 and $56.96, $14.24 per unit, is what the promotion costs you. Subtract your product cost, shipping and other fees from the seller payout to see whether the sale is still profitable. If a discount only makes sense when the list price is raised first, be careful: many countries restrict advertising a discount from a price that was not genuinely charged before.

Common mistakes

• Adding the discount and commission percentages instead of multiplying.
• Assuming the platform shares the cost of the discount when the seller pays it all.
• Forgetting payment fees, shipping fees or VAT that are deducted separately.
• Raising the list price just before a sale to fake a discount.

Frequently asked questions

Is the commission charged before or after the discount?

On most marketplaces it is charged on the price the customer actually pays, as assumed here, but check your platform's terms.

How much must sales grow to make a discount worthwhile?

Compare profit per unit before and after the discount. If profit per unit halves, you need roughly twice the units sold to earn the same total profit.

Can I advertise a higher "was" price?

Under the EU price indication rules, a discount announcement must show the lowest price applied in the previous 30 days. Other jurisdictions have similar rules on misleading reference prices.

Sources: Directive (EU) 2019/2161 amending Directive 98/6/EC on consumer protection in the indication of prices