Product Discounts
How much money you gave away in markdown to move the units you sold.
What it means
Product Discounts is the money taken off your prices in the period, in euros — codes and automatic discounts, summed across the order lines they landed on. It's the gap between the price on the shelf edge and what you actually rang up. Because it's a euro total rather than a rate, it grows with your sales all by itself.
Show the math
Formula and a worked example
Discounts is the sum of every reduction applied to the order lines in the period. Take it off Gross SalesGross SalesRevenue before discounts; compare with Product Revenue for markdown cost. and you have what you really charged for the products.
As a rate, divide it by Gross Sales. That's % Product Discounts% Product DiscountsHow heavily a product is marked down.Under 8% is healthy, and it's the version you can compare between products and between months.
Worked example. March: Gross Sales €72,800, Discounts €7,300. You charged €65,500 for the products, at a markdown rate of 7,300 ÷ 72,800 = 10%. In April Gross Sales reach €91,000 and Discounts €12,700 — the euro total jumped 74%, but the rate only moved from 10% to 14%.
Read both or you'll misjudge every promotion you run. A bigger total on a bigger month is arithmetic; a rising rate is a decision somebody made.
It answers the question
What did it cost you to sell at the prices people actually paid? Every euro here was margin you had before checkout and didn't have after.
Why it matters
Discounts come straight off the bottom line. There's no cost of goods behind them and no work in them — €7,300 of markdown is €7,300 less profit, unless it bought units that wouldn't otherwise have sold.
Per product, this is where over-discounting hides. A sitewide code applies to your bestseller exactly as readily as to the slow line you meant to clear, so the product that needed no help ends up giving away the most money. Sort the Products table by this column and the answer is usually uncomfortable.
What good looks like
There's no benchmark for the euro total, and there couldn't be — it scales with sales, so a bigger number in a bigger month means nothing on its own. Judge it two ways instead. As a share of Gross Sales it becomes % Product Discounts% Product DiscountsHow heavily a product is marked down.Under 8% is healthy, which does have real bands. Per product, the question is simpler: are your bestsellers giving away as much as your slow stock, and what did that markdown buy?
How to improve it
| Lever | What you do | Expect | How long | Watch out for |
|---|---|---|---|---|
| Fast Exclude bestsellers from sitewide codes | Set collection exclusions so codes only apply where you actually need the help | Discounts down, units roughly flat | 1–2 weeks | Shoppers who meet the exclusion at checkout abandon more often, so Orders dip for a fortnight and support tickets rise. |
| Fast Put a minimum spend on every code | Set the threshold just above your current average order | Discounts down, order value up | 2–4 weeks | You lose the small first orders codes are best at winning, so the share of new customers softens while the returning base carries more of the month. |
| Slow Give value instead of price | Offer a sample, faster delivery or a bundled extra rather than a percentage off | Discounts fall while conversion holds | 1 quarter | The extra has a real product and postage cost — it moves out of Discounts and into cost of goods, so margin improves by less than this number suggests. |
| Slow Break the sale calendar | Cut the number of promotional events and hold prices in between | Discounts down sharply over two quarters | 1–2 quarters | A base trained to wait for the sale stops buying between them. Expect one genuinely weak quarter before demand settles at full price. |
Every lever costs something somewhere. The last column is the one to read twice.
Read it with
Discounts on its own is a cost. Next to Quantity, it's a receipt for what that cost bought.
The markdown bought volume
Units moved because price moved. Defensible when it clears stock or wins first-time buyers, expensive when it goes to people who were buying anyway.
Paying for nothing
You gave away more and sold less. Price isn't the problem this product has, and a deeper cut won't find it.
Selling at full price
Demand grew with no markdown paying for it. Every euro of that growth reaches the bottom line intact.
Cleaner but slower
You pulled the codes and lost some volume. Fewer units at full margin often beats more units at half, but check it rather than assume it.
The euros and the rate. Together they separate a bigger month from a more generous one: Discounts up 74% with the rate up 4 points is mostly growth, while the same euros on flat Gross Sales is a policy that changed without anyone deciding to change it.
The markdown against what survives every variable cost. Shipping and gateway cost don't shrink with the price, so a 20% cut on a small basket can take the whole contribution with it — which this pair shows and neither number shows alone.
Common misreads
The euro total rides on volume. A bigger month at exactly the same 10% rate produces a bigger number with nothing changed. Check the rate before you change anything.
Some of those orders only exist because of the code. The part worth worrying about is the markdown handed to people who'd have paid full price — usually your bestsellers.
A shop with no markdown has no way to clear slow stock, launch a product or win back a lapsed customer. The aim is discounting that's aimed, not discounting that's absent.
Also called
Line item discounts · markdown · price reductions · product discounts
See yoursDiscounts for the period, and per product on the Products table next to Gross Sales and Quantity.
Open Shopify Overview →