---
title: "Subscribe and save: definition, formula and example"
description: "A standing discount for buying on subscription, often with a deeper first-order discount. Its cost has to be priced over the renewals, not the first order."
url: https://offersuite.io/glossary/subscribe-and-save
updated: 2026-10-13
---

# Subscribe and save

A standing discount for buying on subscription, often with a deeper first-order discount. Its cost has to be priced over the renewals, not the first order.

## In plain words

Subscribe and save is a discount a customer gets for agreeing to recurring orders, typically 10 to 15% off every delivery. Many brands add a bigger discount or a gift to the first order to get the subscription started.

The offer has two prices and two margins. The first order carries the acquisition discount and any first-box extras. Each renewal carries the standing discount. Judging it on either alone is wrong: the first order understates it, and a renewal overstates it if subscribers leave early.

## Formula

- First-order price = list price × (1 − first-order discount)
- Renewal price = list price × (1 − subscribe-and-save discount)

## Worked example

20% off the first $40.00 bag, then 10% off every renewal: $32.00 and $36.00. The engine gives margins of $3.79 and $11.68.

The subscriber passes a one-time buyer's margin at order 3, if 85% of subscribers take each next order.

### 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.

## Subscribe and save is not a discount on every order you'd have had anyway

If most subscribers would have reordered at full price, the standing discount is a cost with little gain. The comparison that matters is a subscriber's expected profit against the one-time buyer's, including how often one-time buyers come back.

## Using it

Price the two discounts together, over the renewals you expect. A deeper first-order discount wins more subscribers and costs more per subscriber; a deeper renewal discount lowers every renewal's margin but may keep subscribers longer. The subscription calculator shows the combined effect at your retention. Remember the one-time buyer too: if a subscribe option draws buyers away from full-price one-time orders, the comparison is against what those buyers would have paid.

## 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 **Subscription first order vs renewal calculator** Margin on a subscription's first order and on each renewal, and the expected profit per subscriber over time at your retention, against a one-time buyer.](https://offersuite.io/calculators/subscription-first-order-vs-renewal)
- [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 **Renewal order: definition, formula and example** A subscription order the subscriber didn't place by hand, billed by the subscription contract. Priced at the renewal price, without first-order-only costs.](https://offersuite.io/glossary/renewal-order)
- [Glossary **Retention rate: definition, formula and example** Of subscribers who received an order, the share who receive the next one. Each renewal's profit is weighted by it, so small changes compound quickly.](https://offersuite.io/glossary/retention-rate)
- [Glossary **Contribution margin: definition and formula** What an order keeps after every cost that grows with it: product cost, fulfilment, shipping, card fees and refunds. The number an offer should be judged on.](https://offersuite.io/glossary/contribution-margin)