BOGO Profit Calculator
"Buy One Get One Free" delivers two units for the price of one — economically different from a 50% discount on a single unit, even though both look like "50% off."
How it works
Classic BOGO (buy 1 get 1 free)
Revenue = Unit price Units delivered = 2 Product cost = 2 × Unit cost Effective discount = 50% of merchandise value
Worked example
$30 unit price, $8 unit cost, classic BOGO, no fees:
- Revenue: $30 for 2 units
- Product cost: 2 × $8 = $16
- Contribution profit: $30 − $16 = $14 (margin 46.7%)
- vs. one regular sale ($22 profit): BOGO earns $8 less per order
The educational point
A plain 50% discount on one unit ($15 revenue, $8 cost, $7 profit) is actually worse per-order than BOGO's $14 profit — because BOGO's second "free" unit still generates revenue from the first unit, while a straight 50%-off single unit does not. Basket size and units delivered matter, not just the headline discount percentage.
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Frequently asked questions
Is BOGO ever a good idea?
It can drive strong perceived value and clear inventory, but it roughly halves margin on merchandise value — model the required volume uplift before running it.
How is BOGO different from 50% off two units?
They can have the same effective discount %, but BOGO always delivers exactly 2 units per redeeming order, while a 50%-off multi-buy can be structured with different quantities and thresholds.
Check the economics behind “free”
BOGO doubles the units delivered but does not double revenue. It works best when unit margin is strong, inventory is available and customers value the second unit enough to change purchase behavior.
Evaluate the offer
- Compare BOGO with a smaller percentage discount at the same expected order volume.
- Confirm that fulfillment and packaging costs reflect two units per qualifying order.
- Consider whether the second unit encourages trial, gifting or unwanted stockpiling.
Operational checks
- Inventory can leave twice as fast even when order count barely changes.
- Customers may delay their next purchase because they received extra product.
- Product exclusions and returns need rules that staff and customers can understand.