Sales Savings Calculator

How to Use This Calculator

1. Enter your original annual sales revenue (the total amount of sales before any discounts)
2. Input the discount rate you plan to apply (as a percentage)
3. Enter the average cost of the products you sell
4. Click the "Calculate" button to see your potential savings

Understanding the Results

The calculator provides three key metrics:

• Potential Sales Savings: The direct amount saved from applying the discount to your revenue
• Cost Savings: The amount saved based on your product costs
• Total Savings: The combined savings from both revenue and cost considerations

Principle Behind the Calculation

The calculator works on the basic principle that applying a discount to sales generates savings. The formula used is:

Savings = Original Sales × Discount Rate / 100

The cost savings is calculated as a proportion of the product cost relative to the original sales.

Example Scenario

For instance, if your annual sales are $100,000, you're applying a 15% discount, and your average product cost is $40:

Sales Savings = $100,000 × 15% = $15,000

Cost Savings = $15,000 × ($40/$100,000) = $0.60

Total Savings = $15,000.60