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.