How much can I afford to discount on Black Friday 2026? (Worked examples included)

Key takeaways

• Black Friday is Friday 27 November 2026 and Cyber Monday is Monday 30 November 2026, although many UK retailers begin promotions earlier in November.
• Your discount floor is the lowest price that still covers unit cost, fulfilment, per-order fees and a minimum profit. It’s a number, not a feeling.
• Percentage fees (card, marketplace, ads) shrink as your price drops. Fixed costs (postage, packaging, per-order fees, unit cost) don’t. That’s why a 20% discount can cut your profit by 45% or more.
• On a 40% gross margin, a 20% discount means you need to sell twice as many units just to make the same money.
• A “was” price must represent a genuine, established usual selling price. Keep evidence of your pricing history and sales, and avoid running the lower promotional price for so long that the comparison becomes misleading.

Black Friday has a nasty habit of flattering the top line and quietly wrecking the bottom one. Orders flood in, the dashboard looks fantastic, and then January’s bank statement tells a very different story.

The reason is simple. Most small sellers set a discount by looking at what competitors are doing, or by picking a round number that “feels” generous.

Almost nobody works out what the discount actually does to the profit on each order once card fees, marketplace commission, postage, packaging, ad spend and returns are stacked on top of the unit cost.

The goal of this article is to fix that. Read on to learn how to calculate your discount floor for your own website, for Amazon, for eBay, and for a physical shop, with real 2026 fee rates and worked examples you can copy into a spreadsheet right now (although you should always check yourself and seek the advice of experts if in any doubt; this article does not constitute legal advice.)

Here’s what we discuss:

What a discount floor is (and why percentages lie to you)

Your discount floor is the lowest price you can sell an item for and still make the minimum profit you’re prepared to accept. Below it, every extra sale costs you money.

The trap is that discounts are expressed as a percentage of the selling price, but most of your costs aren’t.

Royal Mail charges the same £3.65 for a Tracked 48 small parcel whether the item inside sold for £45 or £27. And your supplier does not knock 20% off the unit cost because you ran a promotion.

So, when the price falls, the fixed costs eat a bigger and bigger share of what’s left.

That’s why the headline figure is so misleading. In the first example we quote later in this article, a 20% discount on a £45 product cuts the profit per order by 46%. A 40% discount cuts it by 91%.

Black Friday discounting step 1: Pin down your true unit cost

Unit cost is everything it takes to have one sellable item sitting on your shelf, not just the supplier invoice. When working it out, you should include:

• Purchase price or materials and making time
• Inbound shipping and any import duty
• Packaging that goes out with the product (box, tissue, filler, label)
• Any product-specific extras such as gift bags or inserts

If you make things yourself, put an honest hourly rate on your time.

A £12 “profit” on something that took 40 minutes to make is £18 an hour before tax, and that’s before you’ve answered a single customer message.

Black Friday discounting step 2: Card and marketplace fees

These are the percentage costs, and they vary a lot by channel. Here are the current published UK rates (and bear in mind these do change, so check yourself on the sites we mention before making any big decisions):

	What you pay per sale
Own website: Shopify Payments (Basic plan)	2.0% + 25p online; 1.7% in person
Own website: Stripe	1.5% + 20p for standard UK cards; 1.4% + 10p in person
Amazon UK	Referral fee of 8% to 15% in most categories (15% default), plus a 2% digital services fee on Amazon’s fees, plus 20% VAT on fees. A 15% referral fee is roughly 18.4% in cash if you can’t reclaim the VAT
eBay UK business seller	6.9% to 14.9% by category (12.9% for most, 11.9% for clothing), plus 30p to 40p per order, plus a 0.35% regulatory operating fee, plus 20% VAT on all fees
Etsy UK	6.5% transaction fee on item plus shipping, 4% + 20p payment processing, 0.48% regulatory fee, 15p listing fee, plus 20% VAT on fees. Offsite Ads add 12% to 15% on ad-attributed orders

Two things catch people out.

First, marketplace commission is charged on the total the buyer pays, including postage. So, “free delivery” baked into the price doesn’t dodge it.

Second, if you’re not VAT registered (and most small retail businesses aren’t until turnover passes £90,000), the 20% VAT on those fees is a real cost rather than something you reclaim. Use the VAT-inclusive rate in your sums.

Black Friday discounting step 3: Advertising

Ads get more expensive exactly when you want to run them.

According to research from Lebesgue, the median brand’s Meta cost per mille (CPM) in the Black Friday 2025 week was 59% above its September level, and 84% higher on Black Friday itself.

According to research from AdScale, Black Friday week CPMs were around 57% above October and cost per clicks (CPCs) around 44% higher.

The good news is that conversion rates rise too, so cost per purchase often falls.

But you still need to budget for it.

Take your total expected ad spend for the period, divide by the number of orders you expect, and treat that as a per-order cost.

If you’re running Amazon Sponsored Products, use your ACoS (ad spend as a percentage of sales) as an extra percentage fee instead.

Black Friday discounting step 4: Fulfilment, packaging, and returns

Fulfilment is mostly fixed per parcel.

Royal Mail’s online prices from 5 October 2026 start at £3.65 for Tracked 48 and £4.65 for Tracked 24. Check the online price guide for the exact price for your parcel’s size, weight and options.

Royal Mail business account customers also face a peak surcharge from 2 November 2026 to 10 January 2027, so check your rate card.

Returns are the cost almost everyone forgets, but there’s some powerful research to illuminate likely impacts and costs.

According to the Retail Economics/ZigZag returns benchmark, UK nonfood online returns were forecast at 19.5% for 2025, with clothing the worst category at about 23.6%. According to ReBound Returns, roughly one in three shoppers send back something bought during Black Friday and Cyber Monday promotions, and returns peak in the week after. And according to EightX’s Return Rate Benchmark, each returned parcel costs a small brand roughly £10 to £25 in reverse logistics before you’ve refunded a penny.

To build this in, multiply your category’s return rate by your cost per return and add it as an expected cost per order.

The Black Friday discounting costs formula

Split your costs into two piles:

• Fixed costs per order (F): Unit cost + packaging + postage + per-order fees + ad cost per order + expected returns cost
• Percentage fees (P): Card or marketplace commission as a decimal, VAT included if you can’t reclaim it, plus ACoS if relevant

Then:

Discount floor price = (F + minimum profit you’ll accept) ÷ (1 − P)

Maximum discount = 1 − (floor price ÷ normal price)

Set the minimum profit to zero and you get your absolute break-even. Set it to a real number and you get a price you can actually live with.

Black Friday worked example 1: A product on your own website

Specification: A £45 candle gift set sold through a Shopify store on the Basic plan (2.0% + 25p). Unit cost £14, packaging 80p, Royal Mail Tracked 48 £3.65 (you offer free delivery), and you’ve budgeted £6 of Meta ad spend per order.

Discount	Price	Card fee	Profit per order	Margin
0%	£45.00	£1.15	£19.40	43.1%
10%	£40.50	£1.06	£14.99	37.0%
20%	£36.00	£0.97	£10.58	29.4%
30%	£31.50	£0.88	£6.17	19.6%
40%	£27.00	£0.79	£1.76	6.5%

Break-even price: £25.20, which is a 44% discount. But if you decide you need at least £8 per order to make the extra packing and customer service worth it, your floor is £33.37, or a 25.9% discount. So “25% off” is your headline for the best outcome, and not “40% off”.

Black Friday worked example 2: A product on Amazon

Specification: A £29.99 kitchen gadget in a 15% referral category, fulfilled by merchant (FBM). Unit cost £9.50, packaging 60p, Tracked 48 £3.65. You’re not VAT registered, so the effective Amazon fee is 15% × 1.02 (digital services fee) × 1.2 (VAT) = 18.36%.

Discount	Price	Amazon fees	Profit per order
0%	£29.99	£5.51	£10.73
10%	£26.99	£4.96	£8.28
20%	£23.99	£4.40	£5.84
30%	£20.99	£3.85	£3.39

Break-even price: £16.84 (a 43.8% discount). Now add Sponsored Products at a 10% ACoS. Your percentage fees rise to 28.36%, break-even moves to £19.19 (36% off), and a 20% discount leaves just £3.44 per unit. The ads didn’t look expensive on their own, but they shifted the floor by about eight percentage points.

Black Friday worked example 3: Clothing on eBay (with returns)

Specification: A £60 jacket sold by an eBay business seller, free postage. Clothing final value fee 11.9% plus 0.35% regulatory fee, 40p per order, all plus 20% VAT, giving 14.7% plus 48p. Unit cost £22, packaging 70p, Tracked 48 £3.65.

Discount	Price	eBay fees	Profit per order
0%	£60.00	£9.30	£24.35
20%	£48.00	£7.54	£14.11
30%	£42.00	£6.65	£9.00
40%	£36.00	£5.77	£3.88

Break-even price: On paper it’s £31.45 (47.6% off). Now apply a 23.6% clothing return rate and a modest £7.50 cost per return (outbound postage lost plus a return label). That’s an expected £1.77 per order, which pushes break-even to £33.53 and trims the profit at 30% off from £9.00 to £7.23. On a fashion line, returns are the difference between a sale that pays and one that doesn’t.

Black Friday worked example 4: Bricks-and-mortar shop/high street

Specification: A £25 item sold in store. Unit cost £10, a 15p bag, card fee 1.7% (in-person Shopify Payments on the Basic plan). No postage, no marketplace commission.

Discount	Price	Profit per order
0%	£25.00	£14.43
20%	£20.00	£9.51
40%	£15.00	£4.60
50%	£12.50	£2.14

Break-even price: £10.33, a 58.7% discount. Physical shops can go far deeper than online sellers because so little of the cost is per-order. The catch is that rent, wages and energy are still there whatever you sell, so the real question for a shop is whether the promotion brings in enough extra footfall to cover the week’s overheads…

Which brings us to a discussion about volume!

There’s a neat formula for this:

Extra units needed = discount ÷ (gross margin − discount)

And here’s how to work it out:

Your gross margin	10% off	20% off	30% off
30%	+50%	+200%	Not viable
40%	+33%	+100%	+300%
50%	+25%	+67%	+150%
60%	+20%	+50%	+100%

On a 40% margin, a 20% discount means you need to double your unit sales just to stand still.

Ask yourself honestly whether Black Friday will do that.

UK online revenue across the eight-day Black Friday week in 2025 was down 1.2% year on year according to Interactive Media in Retail Group (IMRG), and shoppers say they’ll spend less this year.

The money is there. It’s just not a tidal wave.

Keep it legal: The “was” price test

A discount is only a discount if the higher price was real.

The current Advertising Standards Authority (ASA)/Committee of Advertising Practice (CAP) guidance says the reference price should represent a genuine, established usual selling price. The ASA has upheld rulings this year against major retailers whose “was” prices hadn’t been charged for long enough or in sufficient volume, and it could expect detailed day-by-day pricing and sales data covering at least three months to back up any savings claim.

The High Court’s July 2026 ruling in the Competition and Markets Authority (CMA) Emma Sleep case rejected a rigid 1:2 sales ratio, but the duration test survived: the product should have been on sale at the “was” price for at least as long as it’s offered at the discount.

Practically, that means if your sale runs 23 November to 1 December, the full price needs to have been live from mid-November at the very latest, and ideally for a month or more.

Export your price history for your top lines now, and drop the strikethrough on anything that doesn’t qualify.

Final thoughts

Black Friday rewards sellers who know their numbers, not sellers who shout the biggest percentage.

Once you’ve separated your fixed per-order costs from your percentage fees, the discount floor is easily calculated via a one-line formula, and you can set a headline that’s generous to customers without being reckless with your margin.

The pattern across all four examples we quote above is consistent. Online sellers with postage and marketplace fees usually hit zero profit somewhere between 35% and 47% off, and a sensible floor with real profit left in sits around 20% to 30%. Physical shops have more room per item but need the footfall to cover overheads. Fashion sellers need to price in returns before they price in anything else.

Three things to do this week:

1. Calculate your floor for every line you plan to promote.
2. Check your “was” prices will stand up.
3. Decide in advance how many extra orders you need before the discount pays for itself.

If the maths doesn’t work, a smaller discount, a bundle, or free delivery over a threshold will often do more for you than a headline number you can’t afford.

FAQs about Black Friday and Cyber Monday sales

What’s a safe Black Friday discount for a small online business?

There’s no universal figure, but once postage, marketplace fees and ad costs are included, the examples above suggest most small online sellers find their break-even sits between roughly 35% and 47% off, and a floor that keeps meaningful profit is usually 20% to 30%. Run the formula for each product rather than applying one percentage across the range.

How do I calculate my discount floor?

Add up your fixed costs per order (unit cost, packaging, postage, per-order fees, ad spend per order, expected returns cost) plus the minimum profit you want. Divide by one minus your percentage fees. The result is your floor price. Compare it with your normal price to get the maximum discount.

Do marketplace fees go down when I discount?

Yes, because they’re a percentage of the sale, but they don’t fall as fast as your profit does. Postage, packaging and unit cost stay exactly the same, so they take up a bigger share of a smaller price.

Should I include VAT on fees in my calculation?

If you’re not VAT registered, yes. Amazon, eBay and Etsy all add 20% VAT to their fees, and you can’t reclaim it. A 15% Amazon referral fee is about 18.4% in cash once the digital services fee and VAT are added. If you are VAT registered, use the ex-VAT rate.

Can I show a “was”/“previously sold at” price on Black Friday?

Only if the higher price was genuine and represented the product’s established usual selling price. Keep pricing and sales records to support the claim. Factors such as how recently and for how long the higher price applied, and whether meaningful sales were made at that price, may all be relevant. The ASA has upheld complaints where the promotional price lasted longer than the supposed reference price.

How much should I budget for returns?

Use your category’s return rate multiplied by your cost per return. Across UK non-food online retail as a whole, the forecast return rate was around 19.5% in 2025, rising to about 23.6% for clothing.

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