Scenario Tools - Pricing and Discount Calculators

Scenario Tools

Scenario tools are interactive calculators for decisions you make before the data exists. The rest of MerchantFlow reports what happened; these four model what would happen -- what a 20% discount does to the ROAS you need, what price a product has to carry to hit your margin target, whether a bundle is worth the discount.

Open them from Dashboard → Tools, which lists all four: Discount Impact, Pricing Waterfall, Bundle Margin, and Gift with Purchase. They are not plan-gated -- every tier can use them.

Each tool seeds itself from your store averages when the page loads, so you start from your real AOV, COGS, and cost structure rather than typing assumptions. The averages come from a fixed 90-day window, and a teal Your store badge appears on the input panel when seeding actually happened. Seeding runs once per visit and never overwrites a value you have edited; a store with no synced data yet keeps the tool's own placeholder defaults. All figures use your store's currency.

Discount Impact

What it answers: how much harder your ads have to work when you cut price.

Discounting compresses margin, and compressed margin raises the ROAS you need just to break even:

Break-even ROAS = 1 / gross margin %
Break-even CAC  = gross margin in currency on the order

You enter Average order value, Total cost per order, Discount %, and Current ROAS. The tool renders two side-by-side cards, Before discount and After N% discount, each showing effective price, gross margin in currency, gross margin %, break-even ROAS, and break-even CAC. A Bottom line panel below states how far the break-even ROAS jumped, how profit per order changes at your current ROAS, and how many more orders you would need to hold absolute profit flat.

If your current ROAS falls below the discounted break-even, a red warning says the discount loses money on every order.

The result is usually uncomfortable. A discount that looks like a small margin sacrifice often demands a materially higher ROAS -- and if your campaigns cannot deliver that ROAS, the promotion loses money at exactly the moment revenue looks strongest.

Use it before running a sitewide sale, approving a coupon for a partner, or setting a discount tier.

Pricing Waterfall

What it answers: the lowest price a product can carry and still hit your margin target.

Rather than starting from a price and computing margin, this one works bottom-up. You set a target CM3 and enter every cost component, and the tool returns the minimum viable retail price:

per-unit costs  = product cost + freight + duties + shipping + pick & pack + CAC
variable rate % = transaction fee % + refund allowance % + discount allowance %
minimum price   = per-unit costs / (1 - (variable rate % + target CM3 %) / 100)

Note what is inside that per-unit total: CAC is a cost here, so the CM3 this tool targets is margin after acquisition, not just after channel and delivery costs.

Two modes sit above the inputs: Forward (target → price) and Reverse (price → CM3). Reverse takes a retail price and returns the CM3 it produces. If the variable rate plus your target CM3 reaches 100%, no price satisfies the target and the tool says so rather than returning a number.

The decision rule is blunt and useful -- if competitors are priced below your minimum viable price, the product does not work at your cost structure. Fix the cost base or drop the SKU.

Use it before launching a product, after a supplier price change, or when deciding whether to match a competitor.

Bundle Margin

What it answers: whether a bundle earns more than the same products sold separately, and how deep you can discount it.

Bundles usually improve gross margin because shipping and fulfillment do not scale one-for-one with units -- two items in one parcel cost far less to deliver than two parcels. The tool compares bundle economics against the sum of the individual products and shows how much further you could discount before bundle margin turns negative.

Enter each component with its name, Price, COGS, and Qty -- Add and remove rows freely -- then set the Bundle price, Shipping per unit (single), a Shipping uplift per extra unit percentage, and your Payment fee %. The uplift is what encodes the saving: bundle shipping is one base shipping charge plus that uplift for every unit past the first, against a full shipping charge per unit when the items ship separately.

Use it before setting bundle pricing. For tracking bundles you already sell, see bundle tracking, which handles COGS allocation across components on real orders.

Gift with Purchase

What it answers: whether a free gift lifts AOV by more than the gift costs.

Enter the Trigger AOV (the order value at which the gift unlocks), Trigger order COGS, Gift COGS, Gift perceived value, Historical AOV (no GWP), and Payment fee %. The tool compares margin with and without the gift, shows the AOV lift you are actually getting against your pre-promo baseline, and the perceived-value-to-cost ratio.

The economics favour gifts with high perceived value and low unit cost -- those lift AOV without meaningfully compressing margin. A gift that is genuinely expensive rarely pays for itself.

Use it before setting a gift-with-purchase threshold or picking which product to give away.

Scenario tools vs the dashboard

These are modelling tools. Nothing you enter is saved to your store, and no figure here changes your P&L.

When you want the recorded outcome rather than the projection:

• Real discount performance → discount codes
• Real bundle margins → bundle tracking
• Real per-product economics → product viability and unit economics

Common questions

Are my inputs saved? No. The tools are stateless -- reloading clears them.

Where do the seeded store averages come from? Your synced order and cost data over a fixed 90-day window, so the baseline is stable between visits rather than shifting with the dashboard time range. If your COGS coverage is incomplete, the seeded costs will be optimistic, and so will every result built on them.

Are there public versions of these? MerchantFlow publishes a set of free calculators on its website that anyone can use without an account. The in-app tools differ in one important way: they seed from your actual store data.