How to Use This Tool
Separate planned promotional discount from excess discount actually granted. Estimate revenue and contribution leakage when realized discount rates exceed the planned promotional allowance on eligible sales.
The decision this tool supports
Teams often report average discount without translating a few extra percentage points into dollars of contribution consumed. This page keeps the decision bounded to excess discount leakage and the supporting outputs shown beside it. Discount Leakage does not import an account, infer a market rate, or silently substitute an industry average.
Inputs and units
The Discount Leakage calculation uses Eligible list-price sales, Planned discount, Actual discount, Contribution margin before discount. Keep all money values in one currency and all time, distance, mass, energy or volume entries in the unit printed beside the field. Mixing Discount Leakage scopes can produce a plausible number with the wrong meaning.
- Eligible list-price sales is entered in currency.
- Planned discount is entered in %.
- Actual discount is entered in %.
- Contribution margin before discount is entered in %.
Formula and worked check
Leakage = list-price sales × max(actual discount − planned discount, 0); contribution impact ratio = leakage ÷ planned contribution. $100,000 of eligible sales at 11% actual versus 8% planned discount creates $3,000 of excess leakage, 8.6% of $35,000 contribution. The Discount Leakage default is an executable known-answer case, not a benchmark or recommendation. Change one input and verify that the direction of excess discount leakage still matches the stated relationship.
How to interpret the result
A zero result means actual discount did not exceed plan; it does not mean the planned discount itself was profitable. The additional Discount Leakage outputs expose the denominator, comparison, capacity or reverse value needed to audit the primary result instead of presenting one unexplained number.
Assumptions
- List-price sales are measured before either discount.
- Planned and actual rates use the same eligible revenue base.
- Contribution margin is entered before discount leakage.
Save the Discount Leakage input values and date with any material decision. A later Discount Leakage rerun is reproducible only when the same assumptions and units are available.
Limitations and safety boundary
It treats discount as the only revenue difference and excludes volume lift, returns, rebates, taxes and product-mix changes. Discount Leakage is an estimate and cannot replace a contract, local code, licensed professional, calibrated measurement, lender statement or platform report where one governs the decision.
Source and privacy
The Discount Leakage definition or rule was checked against U.S. Small Business Administration — Manage your finances on 2026-08-26. Recheck U.S. Small Business Administration — Manage your finances when a specification or policy behind Discount Leakage can change. Discount Leakage arithmetic runs in this browser tab; ecech does not receive the values through a calculation API.
Sources & assumptions
Tool Spec v2 · verified 2026-08-26. Platform rules and fees can change; the editable inputs remain authoritative for your account.
Official references
- U.S. Small Business Administration — Manage your finances (checked 2026-08-26)
Model assumptions
- List-price sales are measured before either discount.
- Planned and actual rates use the same eligible revenue base.
- Contribution margin is entered before discount leakage.
- It treats discount as the only revenue difference and excludes volume lift, returns, rebates, taxes and product-mix changes.
