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A 50 bundle of a 40 item and a 25 item
Item A sells alone for 40 and costs 18. Item B sells alone for 25 and costs 10. The bundle price is 50. Those prices are an example so you can see the arithmetic. Publication 334 does not set a bundle discount.
Item A shelf price: 25% lower
Change item a shelf price to 30 while keeping the other example values the same.
Item A shelf price: 25% higher
Change item a shelf price to 50 while keeping the other example values the same.
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Quick answer
What does the Bundle discount margin calculate?
What margin is left on a product bundle? This calculator uses item a shelf price, item a unit cost, item b shelf price, item b unit cost, and bundle price to estimate gross profit on one combined price immediately in your browser.
With the values currently entered, the result is 44% — of the bundle price. It also shows bundle profit, combined unit cost, discount versus separate prices, and profit if sold separately.
How to use the Bundle discount margin
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Item A shelf price
- Item A unit cost
- Item B shelf price
- Item B unit cost
- Bundle price
Bundle discount margin formula
Bundle profit = bundle price - (item A cost + item B cost). Margin = that profit ÷ bundle price. The discount is the two shelf prices minus the bundle price.
Assumptions
- IRS Publication 334, chapter 7, figures gross profit as net receipts minus cost of goods sold, then compares that profit with net receipts. The receipt here is the bundle price. The cost is the two unit costs added together.
- SBA defines contribution margin as the price minus the cost to make the product. Shelf prices are the amounts you type. Publication 334 does not set a bundle discount.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Chapter 7 figures gross profit as net receipts minus cost of goods sold. It then tests accuracy as that profit divided by net receipts, compared with the markup policy.
Break-even pointUS Small Business AdministrationScope: US small-business planning; method is generalDefines contribution margin as the difference between price and the cost to make the product, and writes the ratio as (price − variable cost) ÷ price.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Bundle discount margin example and edge cases
A bundle margin is the gross profit on the combined price. IRS Publication 334 figures gross profit as net receipts minus the cost of goods sold. Here the receipt is the bundle price, and the cost is the two unit costs added together.
Example: A 50 bundle of a 40 item and a 25 item
Item A sells alone for 40 and costs 18. Item B sells alone for 25 and costs 10. The bundle price is 50. Those prices are an example so you can see the arithmetic. Publication 334 does not set a bundle discount.
- Item A shelf price
- 40
- Item A unit cost
- 18
- Item B shelf price
- 25
- Item B unit cost
- 10
- Bundle price
- 50
Calculated result44%of the bundle price
Combined cost is 28. Profit on the 50 bundle is 22, which is 44 percent of the bundle price. Sold separately, the two items bring in 65 and a profit of 37. The bundle gives up 15.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 44 percent first. It is 22 of profit divided by the 50 bundle price. The 22 is 50 minus the 28 of unit cost.
- The separate shelf prices add to 65. The bundle is 15 less, and the cost does not change, so that 15 is also the profit you give up. A different pair of shelf prices changes the gap.
Edge cases worth checking
A third product is missing from the two cost boxes
Add its cost into one of the cost boxes, and its shelf price into that item’s price box. Leave it out and the 44 percent describes a bundle that is cheaper to ship than the one you actually sell.
The bundle costs more than the two shelf prices
A bundle can be priced above the two items bought alone, for example when you include a setup visit. The discount line turns negative. Profit is still the bundle price minus the two costs.
What changes the result most
Item A shelf price
Use a current amount for item a shelf price. Include fees or recurring costs that belong in the same figure.
Item A unit cost
Use a current amount for item a unit cost. Include fees or recurring costs that belong in the same figure.
Item B shelf price
Use a current amount for item b shelf price. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Item A shelf price: 25% lower
3044%of the bundle price
Item A shelf price: 25% higher
5044%of the bundle price
Item A unit cost: 25% higher
2334%of the bundle price
Common mistakes
Check item a shelf price
IRS Publication 334, chapter 7, figures gross profit as net receipts minus cost of goods sold, then compares that profit with net receipts. The receipt here is the bundle price. The cost is the two unit costs added together. Make sure this matches the number you enter.
Keep bundle price consistent
SBA defines contribution margin as the price minus the cost to make the product. Shelf prices are the amounts you type. Publication 334 does not set a bundle discount. Use the same units and time period throughout the calculation.
Do not rely on one bundle discount margin scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What margin is left on a product bundle?
It does not replace a quote, contract, accountant, or local employment guidance.