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Promo campaign economics on marketplaces: when a discount loses money

How to run the numbers on a promo campaign before you press "accept": the break-even discount formula, how much sales uplift is needed to compensate, the hidden effects of promos and when opting out beats taking part.

A promo campaign is a deal with the platform: you give up margin, the platform gives traffic and visibility. The deal can be profitable or ruinous, and the only way to tell them apart is to run the numbers before you press "accept". Here is the arithmetic of the discount, the hidden effects and the criteria for saying no. The strategic question of whether to take part at all is covered in the basic guide to promo campaigns; this guide is pure economics.

The main formula: how many sales a discount has to bring

A discount cuts not the price but the margin — entirely out of your share.

Let the per-unit margin before the campaign be M and the price discount be D (in roubles per unit). Then, to earn the same as without the campaign, sales have to grow by a factor of M / (M − D).

Example: a margin of 300 ₽ and a discount of 150 ₽ → sales have to double just to break even. A discount of "only 10% off the price" on a 20% margin is minus half of your margin and a demand to double sales.

The full calculation: what else changes during a campaign

  1. Commissions and logistics do not shrink — the commission percentage is taken from the new price, but per-unit logistics stays the same, and its share of the margin grows.
  2. Volume moves costs. More shipments at the peak mean paid inbound processing, slots and cash frozen in the stock built for the campaign: working capital.
  3. Returns go up. Impulse purchases at a discount have a worse buyout rate — build in an adjustment for returns.
  4. Ads cost more at the peak. If you support the campaign with traffic, auction bids rise during a sale event: keep ad spend share (DRR) under control.

What a campaign gives besides sales (and how to value it)

  • A ranking boost. A spike in sales and buyouts improves the card's behavioral signals — the effect outlasts the campaign. That is real value, but you cannot book it as profit in advance: measure positions before and after.
  • Visibility and badges — campaign labels lift CTR.
  • Clearing stock. For illiquid inventory a campaign is the cheapest way out: here the comparison is not against full margin but against the cost of storage and frozen cash.
  • Penalties for opting out. On some platforms not taking part cuts visibility — price the cost of refusal honestly, but without panic: the visibility loss is usually smaller than a month of trading at a loss.

Decision criteria

  • Take part: the sales uplift from past campaigns is ≥ the figure the formula requires; or the goal is clearing stock or ramping up a new product, and this is cheaper than the alternatives.
  • Take part selectively: enter individual SKUs into the campaign (illiquid stock, traffic drivers) and keep the high-margin core out.
  • Opt out: the margin is thinner than the discount (trading at a loss on volume), there is no stock (a campaign without inventory means losing positions once you run out of stock), or the card is already growing on its own.

Preparing the card and the stock for major sale events has a checklist of its own.

FAQ

"How do I tell whether a promo campaign pays off?" Convert the discount into roubles per unit and divide the margin by "margin minus discount" — that gives the sales growth required. Compare it with the real uplift from past campaigns: if you need ×2 and campaigns deliver +40%, taking part loses money.

"Why did profit fall after the campaign even though sales grew?" Sales grew less than the discount required, and on top of that returns, logistics and peak-time advertising went up. Turnover and profit are different metrics: count the per-unit margin after all costs.

"What should I do if the platform "punishes" sellers for opting out?" Price both options: the visibility lost by opting out versus trading at a loss. The compromise is partial participation: illiquid stock and traffic SKUs go into the campaign, the high-margin core stays out.

"Should I raise the price before a campaign?" Platforms monitor the price before a campaign and penalize artificial hikes — that is a sanctions risk. The right approach is to build the promo price range into your price calculation from the very start.

"Which SKUs should go into a campaign first?" Illiquid stock (cheaper than storage), new products that need their behavioral signals ramped up, and traffic-driver products that pull traffic to the rest of the assortment. The high-margin core goes in only when the formula adds up.

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