A 35% discount doesn’t require 35% more sales. It requires +84% more revenue.
Most fashion brands are destroying their margins right now because they are doing “Revenue Math” instead of “Profit Math”.
I am watching 80% of the fashion brands I advise slash prices by 30-50% for Black Friday. When I open their unit economics, the room usually goes quiet.
At Grapefox, I built a simulator to visualize “Negative Operating Leverage.”
Let’s look at the actual math from the scenario in the image below: (actual client)
The Setup
๐ง๐ต๐ฒ ๐ฆ๐ฒ๐๐๐ฝ
โณ Original Price: โฌ120 (VAT EXCLUDED)
โณ Variable Costs: โฌ55 (COGS, Shipping, Pick & Pack)
โณ Original Profit: โฌ65
๐ง๐ต๐ฒ ๐๐ถ๐๐ฐ๐ผ๐๐ป๐ (๐ฏ๐ฑ% ๐ข๐ณ๐ณ)
โณ New Price: โฌ78
โณ Variable Costs: Still โฌ55 (These don’t go down just because your price did)
โณ New Profit: โฌ23
๐ง๐ต๐ฒ ๐ง๐ฟ๐ฎ๐ฝ
You discounted the price by 35%, but you slashed your profit by nearly 65% (dropping from โฌ65 to โฌ23).
To make the exact same amount of total profit at the end of the day, you do not just need a little more volume. You need to generate +84% more revenue.
In practical terms: You now need to generate โฌ1.84 in sales just to equal the value of your old โฌ1.00.
Why You Need to Ship 3x the Units
๐ช๐ต๐ ๐๐ผ๐ ๐ป๐ฒ๐ฒ๐ฑ ๐๐ผ ๐๐ต๐ถ๐ฝ ๐ฏ๐ ๐๐ต๐ฒ ๐๐ป๐ถ๐๐ ๐๐ผ ๐บ๐ฎ๐ธ๐ฒ ๐๐ฝ ๐ณ๐ผ๐ฟ ๐๐ต๐ฒ ๐ฑ๐ถ๐ณ๐ณ๐ฒ๐ฟ๐ฒ๐ป๐ฐ๐ฒ (This is the part that catches founders off guard.)
To earn your original โฌ65 profit target:
โณ Before the discount, you had to sell 1 unit (โฌ65 profit x 1)
โณ After the discount, earning โฌ23 per unit, you now have to sell 2.8 units to hit that same โฌ65 target
๐ฌ๐ผ๐ ๐ต๐ฎ๐๐ฒ ๐๐ผ ๐๐ต๐ถ๐ฝ ๐ป๐ฒ๐ฎ๐ฟ๐น๐ ๐ฏ ๐๐ถ๐บ๐ฒ๐ ๐๐ต๐ฒ ๐ฝ๐ต๐๐๐ถ๐ฐ๐ฎ๐น ๐๐ผ๐น๐๐บ๐ฒ ๐ท๐๐๐ ๐๐ผ ๐๐๐ฎ๐ป๐ฑ ๐๐๐ถ๐น๐น ๐ณ๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ฎ๐น๐น๐.
This creates massive Operational Debt:
โณ 3x the packaging labor
โณ 3x the shipping logistics
โณ 3x the customer support tickets
โณ 3x the return processing risk (and during and immediately after BF, they tend to be higher)
Unless you have massive operational slack and zero cash flow, this is a dangerous game.
The only times a discount this deep makes sense:
โณ Liquidation: You are clearing dead stock to free up cash for new collections.
โณ Survival: You desperately need cash flow today to pay bills tomorrow.
If you are doing it just because everyone else is, you aren’t executing a strategy.
We call it: “The blind leading the blind.”
Don’t let “Black Friday” turn into “Red Q4.”
