Photo Booth Business

How Much Does a £50 Discount Actually Cost Me?

A £50 discount normally reduces profit by the full £50, because most event costs do not fall when the price falls.

CalcProfits Editorial TeamPublished 3 min read
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A £50 discount normally reduces profit by the full £50 because most event costs do not fall when the price falls. If a booking originally made £150 profit, the discount removes one third of that profit even though it may represent only 10% of a £500 selling price.

Price and profit do not move by the same percentage

Suppose a package sells for £500 and costs £350 to deliver. Profit is £150. Reducing the price to £450 does not reduce staff, travel, prints, insurance or setup time. Profit falls to £100.

The customer receives a 10% price reduction, but the operator loses 33.3% of the original profit. This is why discounts should be tested against profit rather than judged only as a percentage of price.

A £50 reduction on a £500 package (illustrative)
ItemIllustrative result
Original price£500
True event cost£350
Original profit£150
Discount£50 or 10%
New price£450
New profit£100
Profit lost£50
Percentage of original profit lost33.3%
Bookings needed to replace 40 full-price events60 discounted events

Include percentage fees

Some costs do fall slightly with price. A card-processing percentage will reduce when the transaction value falls, and tax treatment may alter the exact figures. The saving is normally small compared with the discount.

If a 2% payment fee applies, reducing the price by £50 saves £1 in fees. Profit still falls by approximately £49. A calculator should apply the actual cost structure rather than assuming every cost is fixed.

Calculate the extra bookings required

Recovering lost profit

bookings needed = annual profit target ÷ profit per discounted booking

At £150 profit per full-price booking, 40 bookings create £6,000. At £100 profit after discount, the business needs 60 bookings to create the same £6,000 — 20 additional events.

Extra bookings also use dates and capacity. If Saturdays are limited, replacing lost profit may be impossible even when the enquiry volume exists. What to charge for a Saturday wedding explains why peak dates behave differently.

Reduce scope instead of margin

When a customer has a genuine budget limit, change the service rather than quietly removing profit. Offer a shorter hire, digital-only delivery, fewer staffed hours, a local-date option or a simpler package. The customer pays less because the business delivers less cost or time. Package pricing makes those steps easy to present.

The revised offer must remain clear about what is and is not included. Avoid presenting a stripped-back package as identical to the original with a temporary saving.

Use discounts deliberately

A discount can make sense when it fills otherwise unused capacity, secures a valuable repeat client or reduces another cost. The reason should be measurable. A midweek event may use capacity that would otherwise earn nothing, but it still must cover its event costs and contribute appropriately.

Set approval rules for yourself or staff. Before offering a discount, check the new profit, margin, hourly return and the number of extra bookings required to recover the annual difference.

Use the CalcProfits Discount Impact Calculator to see profit lost, margin change and additional bookings required before offering a reduction.

Frequently asked questions

Does a £50 discount always remove £50 of profit?
Nearly, when costs stay fixed. Percentage payment fees may create a small saving.
When can discounting make sense?
When the booking uses otherwise empty capacity or produces a measurable benefit and still meets your minimum return.
Is a free add-on better than a discount?
Only if the add-on’s true delivery cost is lower than the cash discount and the core booking remains profitable.

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Planning note

This article provides general business-planning information, not tax, legal, accounting or regulated financial advice. Results depend on the figures entered and do not guarantee future bookings or profit. All monetary examples are illustrative planning scenarios rather than claimed industry averages.