Short answer: A Black Friday promotion only makes a profit if the extra orders bring in more than the discount, the pricier advertising and the extra returns cost you combined. So calculate your break-even discount in advance, based on your contribution margin. Afterwards, measure not only the revenue in the promotion week, but also the returns and the sales in the weeks that follow.
This year Black Friday falls on Friday 27 November 2026, with Cyber Monday on 30 November. For many online stores it is the busiest week of the year. But record revenue is not the same as record profit. In this article we work out what a discount costs you, how many extra sales you need and which rules apply to your was/now prices.
How much margin does a discount cost you?
A discount comes straight off your margin. Your purchase costs, shipping and packaging don't get any cheaper because you give 20 per cent off. That is why the starting point is your contribution margin before advertising: what an order earns after all variable costs except marketing. You can read how to calculate it in Calculating contribution margin: what you really keep per order.
Suppose you sell a product for €100 excluding VAT (21% in the Netherlands). The purchase cost is €40, and shipping, packaging and payment fees together come to €10. You keep €50 per order: 50 per cent.
| Normal price | 20 per cent discount | 30 per cent discount | |
|---|---|---|---|
| Selling price excl. VAT | €100 | €80 | €70 |
| Purchase cost | €40 | €40 | €40 |
| Shipping, packaging and payment fees | €10 | €10 | €10 |
| Contribution margin before advertising | €50 | €30 | €20 |
| Orders needed for €5,000 margin | 100 | 167 | 250 |
| Corresponding revenue | €10,000 | €13,333 | €17,500 |
| Extra orders needed | + 67 per cent | + 150 per cent |
So at a 20 per cent discount you need 67 per cent more orders to keep the same amount. At a 30 per cent discount you need to sell 2.5 times as much. And that is before the higher advertising costs and the returns.
Required volume factor = margin ÷ (margin − discount)
Enter margin and discount as a percentage of the normal price. With a 50 per cent margin and a 30 per cent discount, that is 0.50 ÷ 0.20 = 2.5.
Why are your ads more expensive that week?
Google Ads and Meta run on auctions. During Black Friday week, far more advertisers are bidding for the same customers. How much more a click or an impression costs varies by sector and by year. So check in your own account what your cost per order was in that week last year, compared with October.
Suppose you normally spend €15 on advertising per order and this rises to €20 in the promotion week. With a discount that has already halved your margin, that is a large share of what remains. So in that week, steer on MER and POAS rather than ROAS. How to calculate them is explained in Calculating ROAS, POAS and MER.
How do returns and payment fees factor in?
For online purchases in the EU, your customer has a 14-day cooling-off period from receipt. After that they have another 14 days to send the product back, and you must refund within 14 days of the cancellation. If the customer returns the whole order, you also have to refund the shipping costs they paid.
An order placed on 27 November can therefore come back as late as the end of December. Promotion shoppers often order more impulsively and sometimes buy several variants to choose from. So don't use your normal return rate; use a cautious estimate.
With a return, the product goes back into stock, but you lose the gross margin on that order and you pay for return shipping and handling. Your payment fees also deserve attention. A fixed amount per transaction weighs more heavily on a lower order value, while a percentage of the order value does fall along with it. Check your payment provider's pricing page to see what you pay per method and whether you get those fees back when you issue a refund.
Worked example: a normal week versus Black Friday week
Suppose the same store gets 100 orders in a normal week. In Black Friday week it gives 20 per cent off and sells 2.5 times as much. Each return costs €15 in return shipping and handling, on top of the lost gross margin.
| Normal week | Black Friday week | |
|---|---|---|
| Orders | 100 | 250 |
| Revenue excl. VAT | €10,000 | €20,000 |
| Contribution margin before advertising | €5,000 | €7,500 |
| Advertising (€15 or €20 per order) | − €1,500 | − €5,000 |
| Return rate | 8 per cent | 15 per cent |
| Returns | 8 | 38 |
| Lost gross margin (€60 or €40 per return) | − €480 | − €1,520 |
| Return costs (€15 per return) | − €120 | − €570 |
| What is left | €2,900 | €410 |
Revenue doubles, but you keep almost €2,500 less than in an ordinary week. A dashboard that only shows revenue reports a top week. A dashboard showing contribution margin reveals that the promotion cost money.
How do you calculate your break-even discount?
Turn the sum around: how much discount can you give for the number of extra orders you realistically expect?
Break-even discount = margin × (1 − 1 ÷ expected volume factor)
Suppose you have a 50 per cent contribution margin and expect to sell twice as much. Your break-even discount is then 0.50 × (1 − 1 ÷ 2) = 25 per cent. Give more discount than that and you earn less than without a promotion. If you expect to sell 1.5 times as much, it drops to 0.50 × (1 − 1 ÷ 1.5) = 16.7 per cent.
If you want to include the higher advertising costs and returns, use your contribution margin after advertising and returns as the margin. The room for discounting then shrinks. An alternative is to discount only high-margin products, or to use a bundle or a free gift instead of a percentage.
What do you measure before, during and after the promotion?
Before the promotion (now):
- Your normal contribution margin per day and per week as a benchmark.
- Your advertising cost per order over the past few weeks.
- The lowest price per product in the 30 days before the promotion. You need it for your was/now price.
- Your stock: a sold-out product with a running ad only costs money.
During the promotion:
- Contribution margin per day, not just revenue.
- MER: total revenue divided by all your advertising costs. If it drops below your break-even, scale back your budget.
- Which products are selling. If it is mainly the lowest-margin products, your average margin will come out lower than planned.
After the promotion:
- Returns up to and including the end of December, with the return rate per product.
- Sales in the weeks before and after the promotion. If customers wait for Black Friday in the preceding weeks, part of your extra orders has simply shifted rather than been added.
- How many new customers order again. A promotion with little profit can still be worthwhile if those customers come back later, but you only know that after a few months.
Which figures to track all year round is covered in Online store KPIs: the 12 figures you should track.
Which rules apply to was/now prices?
Since 1 January 2023, Article 5a of the Dutch Price Indication Decree (Besluit prijsaanduiding producten) has applied. It is the Dutch implementation of the European directive on the modernisation of consumer protection (also known as the Omnibus Directive). If you announce a price reduction, you must compare the discount with the lowest price you charged in the 30 days before. The Netherlands Authority for Consumers and Markets (ACM) explains how this works on its page about displaying prices:
- A struck-through price, "was €99, now €79" or "20 per cent off" must be based on your lowest price in the past 30 days.
- A product that has been on sale for less than 30 days: the lowest price since its introduction applies.
- A discount you increase step by step within a maximum of 3 months: you may use the lowest price in the 30 days before the first discount.
- If you use terms such as "recommended retail price", explain straight away what they mean.
So if you temporarily gave 15 per cent off in October, you cannot compare your Black Friday price with the original price. The ACM enforces this actively. In 2024, five online stores were fined a combined €621,000 for fake discounts. Around Black Friday 2025, the ACM found misleading price displays at 18 of the 24 sellers it investigated. Consumers can report a suspected fake discount to ACM ConsuWijzer, the regulator's consumer information service.
Frequently asked questions
How much extra revenue do I need to make up for a 20 per cent discount?
That depends on your margin. With a 50 per cent contribution margin you need 67 per cent more orders. With a 40 per cent margin you need twice as many orders. Work it out with the formula margin ÷ (margin − discount).
When will I know whether my Black Friday promotion was profitable?
Only once the return period has ended. Because of the cooling-off period and the time allowed to send items back, orders from late November can be returned until the end of December. So draw up the final balance in early January.
Can I give a Black Friday discount on the recommended retail price?
You may show a recommended retail price if you explain what it means. The discount itself must be compared with the lowest price you charged in the preceding 30 days, not with the recommended retail price.
What is a break-even discount?
The highest discount at which, with the expected number of extra orders, you keep as much as you would without a promotion. You calculate it as margin × (1 − 1 ÷ expected volume factor).
Want to see what your promotion really earns, day by day, during Black Friday? Ecommetrics puts your revenue, advertising costs and returns from Shopify, Google Ads and Meta side by side and shows your contribution margin per day, excluding VAT. Join the waiting list.