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Guide

Black Friday profit planner for WooCommerce stores

A Black Friday sale can double your orders and still leave you with less money. This guide shows why, and the planner below finds the deepest discount your margins can carry.

How a discount eats your margin

A discount comes off the price. None of your costs go down with it. The product costs you the same, and the carrier charges the same. So every dollar of discount comes out of your profit.

Take a sample product that sells for $80 excluding VAT. It costs you $30 to buy and $7 to ship. The payment fee is 2.9% plus $0.30. At full price, one order leaves you $40.38. At 25% off, it leaves $20.96.

Example: one order at full price and at 25% off
Sample numbersFull price25% off
Price, excluding VAT$80.00$60.00
Product cost−$30.00−$30.00
Shipping you pay−$7.00−$7.00
Payment fee, 2.9% + $0.30−$2.62−$2.04
Profit per order$40.38$20.96

The price fell by a quarter. The profit per order fell by almost half. The thinner your margin, the wider that gap gets. If your costs take 70% of the price, a 30% discount leaves you nothing at all.

Not sure what one order leaves you today? Our guide to profit per order in WooCommerce walks through it.

Extra sales must outgrow the discount

A sale will bring more orders. That part is rarely in doubt. The real question is whether the extra orders make up for the smaller profit on each one.

In the example, a sale order keeps about half of a normal order. So you need about twice the orders to stand still. Most stores also spend more on ads during the sale. That pushes the number of orders you need even higher.

Sale profit = (orders per day × profit per sale order − ad spend per day) × daysDo the same sum for normal days at full price, and compare.

Here is the sample store again. On a normal day it gets 20 orders and spends $150 on ads. Four normal days keep $2,630.40. The sale brings 45 orders a day, with $400 a day in ads. Four sale days keep $2,172.80.

That’s more than twice the orders and $457.60 less money. To find how many orders the sale needs to match a normal period, use this:

Orders needed = (normal-period profit + sale ad spend) ÷ profit per sale orderExample: ($2,630.40 + $1,600) ÷ $20.96 = 201.8, so 202 orders over four days

That’s 122 more orders than four normal days bring in. If you doubt you can reach it, a smaller discount may earn more. In this example, 21% off still beats a normal four days. At 22% off, it falls behind.

Try your own numbers below. Use prices and costs excluding VAT. Nothing you type leaves this page.

One typical order

What the carrier charges you. If customers pay part of it, enter what’s left.

A normal day

The sale

Ad costs rise in Q4

In November, many stores advertise at the same time. More bidders for the same ad space tend to push up what you pay per click and per sale. We won’t quote a figure, because it changes by year, country and niche.

Look at your own numbers instead. Compare your cost per order last November with last October. If it went up, plan for that again, and enter a higher ad spend in the planner.

Judge the sale on total revenue against total ad spend, too. Each ad platform counts the sales it thinks it drove, and the counts overlap. Our guide to MER vs ROAS explains the difference.

A lower price also leaves less room for ads per order. Run your sale price through the break-even ROAS calculator to see the new limit.

Free shipping and payment fees on discounted orders

Free shipping is a common Black Friday extra. It costs you the shipping charge you would have collected. Count it as part of the discount.

For example, on an $80 product, dropping a $5 shipping charge is like another 6% off. In the planner, add those points to the discount.

Payment fees shrink a little with the price, but only the percentage part. The fixed fee per order stays the same. On a cheap item with a deep discount, that fixed part takes a bigger share. Our guide to WooCommerce payment fees shows what each gateway charges.

Stock and returns after BFCM

Some costs of the sale show up after it ends.

  • Stock. A sale can empty your best sellers before December, when they might sell at full price. Check how many days of stock you have before you pick products to discount. Supplier lead times often get longer in Q4, too.
  • Returns. Impulse buys come back more often. A returned order has still cost you shipping and the payment fee, and sometimes a return label. Plan for at least your normal return rate.
  • Cash. Stock you bought for the sale and didn’t sell is money you can’t use until it moves.

A short checklist before Black Friday

  1. Enter product costs in WooCommerce for every product you’ll discount. Our guide to cost of goods in WooCommerce shows how.
  2. Run your main products through the planner and note the deepest discount for each.
  3. Set discounts per product or category, not one number for the whole store.
  4. Pick a daily ad budget and decide when you’ll stop or cut it.
  5. Check stock for the products you’ll push hardest.
  6. Decide on free shipping, and count it in the discount.
  7. Write down what a normal day keeps, so you have a number to beat on the day.

Keep reading

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