Before you run a Black Friday discount, work out what it does to profit

One September a brand came to me running 70% off, two months before Black Friday. Sales were still terrible. The offer couldn't fix the creative, and every order it did bring in went out at 70% off.

Black Friday is when brands reach for the biggest discount they can stomach. Before you do, work out what it does to profit. Revenue is the wrong number to judge a discount on.

Most of the maths below comes from Easy A Media's "Offer Mastery" deck, part of their Evolve 2025 + 2026 material, so credit to them for the ratings and the worked example. The subscription rules near the end are ours.

Why discounts turn into a habit

The deck compares offers to a drug. A good one can lift ROAS and conversion rate overnight. Then the brand finds it can't stop, and every customer needs the offer before they'll buy.

That's fine for one weekend if the numbers work. It's a problem when the offer is covering for ads that aren't good enough, like the 70% off I walked into.

The 30% off month that made less money

Here's the deck's worked example, a normal month against a 30% off sale.

The sale brought in 50% more revenue and made $25k less profit.

Both months ran at 2x ROAS, so in Ads Manager the sale looked just as good. The margin is where it went wrong. At 70% you break even at 1.43x, so 2x leaves plenty over. At 55% you need 1.82x just to break even, and 2x leaves very little.

How to work out break-even ROAS on a Black Friday discount

Run this before the offer goes live:

1. Write down your normal gross margin. If you track contribution margin, use that instead. Our contribution margin guide shows how to build it.
2. Work out the margin after the discount. Take off the cost of any free gift or free shipping you're adding as well.
3. Divide 1 by that margin to get your break-even ROAS.
4. Break-even CPA is your average order value multiplied by that margin.
5. Compare profit after ad spend for the sale against a normal month, laid out like the table above. Revenue on its own won't tell you if the offer made money.
6. Set your testing campaign's target ROAS or target CPA from the new break-even, so Meta bids to the sale's numbers.
7. Check stock and fulfilment can take the spike before you spend money creating it.

Using the deck's two margins, with a $100 order to keep the sums easy:

The deck links a simple calculator for this at ecombusiness.com/profit-calculator. There's more on the formula itself in our break-even ROAS guide.

Which Black Friday offers to use

The deck rates each offer type for Black Friday:

Store credit can cost less than it looks

At a 70% margin, $66 of store credit costs about the same as $20 off, and the customer, or a friend, has to come back to the store to spend it. The catch is that people don't always value a gift card as highly as cash.

Gifts, shipping and bundles sit on top of the main offer

Use them alongside a main offer. For free gifts the deck's first pick is an e-book that helps the customer get the result they bought the product for. A bundle needs a name and a reason to exist.

A smaller offer is often enough

Black Friday pushes every product into "most aware" territory. People are filling baskets on purpose. At that stage a small push, like a slight price cut, a small free gift or a time limit, is usually enough to turn "I want this" into "I'm buying it". Start with the smallest offer you think will get people over the line, then check it against the maths above.

If you're planning the whole season, our seasonal Meta ads guide covers the calendar around the sale.

Subscription offers and the payback period

If the offer signs someone up to a subscription, we hold it to three rules:

1. The first subscription order is at least 25% off.
2. Free gifts come with the subscription.
3. The payback period is worked out before the offer goes live.

The payback period is how long a subscriber takes to cover what you paid to acquire them. To work it out:

1. Take the gross profit on each order after the first-order discount and the cost of the gifts and shipping.
2. Add orders up until the running total covers your CPA.
3. Multiply that number of orders by the delivery interval. That's your payback period.

Use real retention data if you have it, because not every subscriber stays for the later orders. Then make sure the business has the cash to carry ad spend through the whole period. There's more on this in our posts on CAC payback period and subscription ad strategy.

The ads to run during a Black Friday sale

We run three types of sale ad:

1. Evergreen winners with the sale laid over the top.
2. Plain sale ads that say "20% off" or "30% off". These find the people who are ready to buy.
3. Content made for the sale, like sale UGC or gifting UGC.

In my experience the first two beat the third. An evergreen winner already carries the reason people buy. The sale adds a reason to buy now.

That's why the work you do the rest of the year matters here. Attach a proven evergreen angle to a seasonal moment and I'd expect it to beat a sale ad built from scratch.

What one big Black Friday looked like: SaruGeneral

SaruGeneral is a streetwear and resale store that Stefan started out of his parents' garage. I ran its Facebook ads in the early days. One Black Friday it did about £100k in 24 hours, and Stefan puts the return on the Facebook ads that weekend at around 25x.

Two other things were working for the store that weekend:

• A big YouTuber from the streetwear scene posted a video about the store on Black Friday itself. We'd sent him a parcel by next-day delivery the Friday before, at the last minute.
• The store's pitch was price. It sold the same products for less than the shops did.

Stock was the limit. Over that year, Stefan says, they wanted to spend more on ads while they were working, but the products weren't there and orders backed up. If you're planning a bigger Black Friday, plan the stock and the packing alongside the offer. The full conversation with Stefan covers how the store grew from the garage.

FAQ

How much should I discount for Black Friday?

As much as your break-even maths allows and no more than you need. Work out break-even ROAS at the discounted margin first. The deck rates dollar off, percent off and buy X get X free highest for Black Friday.

How do I calculate break-even ROAS with a discount?

Divide 1 by your gross margin after the discount, gifts and shipping. At a 55% margin that's 1.82x.

Is store credit better than a percentage discount?

It can cost less for the same perceived value. At a 70% margin, $66 of credit costs about the same as $20 off. Some customers value cash more than a gift card, so test it.

Should subscription brands discount on Black Friday?

If you do, make the first subscription order at least 25% off, add free gifts, and work out the payback period before launch.

What ads should I run during a Black Friday sale?

Evergreen winners with the sale laid over the top, and plain percentage-off ads. Sale-specific UGC is the third option and in my experience the weakest of the three.