---
title: "Discount allocation: definition and formula"
description: "How a discount on a whole order is divided among its lines. It decides each product's revenue, and so each product's margin."
url: https://offersuite.io/glossary/discount-allocation
updated: 2026-10-13
---

# Discount allocation

How a discount on a whole order is divided among its lines. It decides each product's revenue, and so each product's margin.

## In plain words

Discount allocation is the splitting of an order-level discount across the lines of the order. A $10 code on a cart of two products has to come off something, and the platform spreads it over the lines, usually in proportion to their prices.

It matters as soon as you ask what a single product earned. Each line's revenue is its price less its share of the discount. Leave the allocation out and every product in a discounted order looks as if it sold at full price.

## Formula

- Line's share = order discount × line price ÷ sum of the discounted lines' prices
- Line revenue = price × quantity − the discount allocated to the line

## Worked example

A $10.00 code on an order of a $40.00 bag and a $9.00 mug is split by price. The engine allocates $8.16 to the bag and $1.84 to the mug, in whole cents that add back to exactly $10.00.

The bag's line revenue is its price less its share, and the mug's likewise. Neither sold at its list price.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## The discount total on an order is not a product discount

An order's discount total can include a shipping discount, which belongs to no product. And a discount limited to some products is spread over those lines only. Reading one total and dividing it evenly gets both cases wrong.

## Using it

When you report revenue per product, use each line's price less the discount allocated to that line. Check how your platform splits a discount, and that the parts add up to the whole. Rounding each line separately can lose or invent a cent per order, which is enough to make two reports disagree.

## In Offer Suite

Offer Suite reads the discount Shopify allocated to each line of an order and books line revenue as price times quantity less those allocations. It reads no order-level discount total, because that total includes shipping discounts.

Source: Offer Suite's money definitions, checked against real Shopify orders.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Bundle pricing calculator: shipping, subscriptions** Price a bundle against a single unit, one-time and subscribed, with the shipping and pick costs it saves, and the conversion it can lose and still earn as much.](https://offersuite.io/calculators/bundle-pricing)
- [Glossary **Gross revenue: definition, formula and example** An order's revenue as Offer Suite books it: line prices after discounts plus shipping charged, tax excluded, frozen at the sale as placed.](https://offersuite.io/glossary/gross-revenue)
- [Glossary **Fixed-amount discount: definition and formula** A set sum off the order, such as $10 off. It costs the same on every order, so it weighs far more on a small order than a large one.](https://offersuite.io/glossary/fixed-amount-discount)
- [Glossary **Discount stacking: definition, formula and example** Two or more discounts applying to one order: a sale price, a subscription discount, a code. Each looked affordable alone; together they may not be.](https://offersuite.io/glossary/discount-stacking)
- [Glossary **Net revenue: definition, formula and example** Revenue after refunds: what orders brought in, less what was given back. The revenue that profit is worked out from.](https://offersuite.io/glossary/net-revenue)