A/B Price Test Sample Size Calculator
Calculate the minimum sample size needed for a statistically significant A/B price test. Set confidence level, power, and minimum detectable effect.
Chain Discount Calculator
Calculate net price after a series of successive (chain) discounts. Find the single equivalent discount rate, compare chains, and verify supplier invoices.
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Chain A
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Chain B
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⭐ BEST DEAL
Chain A: 25/10/5
$1,282.50
Save $717.50 (35.88% SED)
Chain B: 30/8
$1,288.00
Save $712.00 (35.60% SED)
Chain A saves $5.50 more (0.28% higher SED)
Chain A Net Price⧉
$1,282.50
64.13% of list
Chain A SED⧉
35.88%
Sum of rates: 40.00%
Compounding Loss⧉
4.12%
SED less than sum of rates
Chain A Waterfall
| Step | Before | Discount | Amount | After |
|---|---|---|---|---|
| Level 1 | $2,000.00 | 25.00% | −$500.00 | $1,500.00 |
| Level 2 | $1,500.00 | 10.00% | −$150.00 | $1,350.00 |
| Level 3 | $1,350.00 | 5.00% | −$67.50 | $1,282.50 |
Chain B Waterfall
| Step | Before | Discount | Amount | After |
|---|---|---|---|---|
| Level 1 | $2,000.00 | 30.00% | −$600.00 | $1,400.00 |
| Level 2 | $1,400.00 | 8.00% | −$112.00 | $1,288.00 |
Planning notes, formulas, and examples
About the Chain Discount Calculator
A chain discount (also called a series or successive discount) applies multiple discount percentages one after another, each reducing the remaining balance. Unlike a simple sum, a 20/15/10 chain does NOT equal 45% off. The actual savings are always less because each successive discount applies to a smaller base.
This calculator lets you input up to six chain discount levels, compare two different chains side by side, and find the single equivalent discount for each. It's an essential tool for B2B buyers evaluating supplier quotes, procurement teams negotiating terms, and anyone who needs to verify multi-level discount calculations.
Use the result to compare scenarios, test assumptions, and revisit the model when pricing, volume, or financing inputs change.
From solo freelancers to mid-market companies, having reliable chain discount data supports stronger negotiations, tighter forecasting, and more confident strategic planning. Modify the inputs above to match your current business conditions and re-run the numbers as often as your market shifts.
From solo freelancers to mid-market companies, having reliable chain discount data supports stronger negotiations, tighter forecasting, and more confident strategic planning. Modify the inputs above to match your current business conditions and re-run the numbers as often as your market shifts.
When This Page Helps
Misunderstanding chain discounts costs businesses real money. Buyers who think 20/10/5 means 35% off are overpaying expectations. Sellers who miscalculate chains give away more margin than intended. It gives precise net price, shows the compounding effect, and makes side-by-side chain comparison effortless. Instant recalculation lets you test different assumptions side by side, giving you the confidence to act on data rather than gut instinct.
How to Use the Inputs
- Enter the list price in the first field.
- Add up to six discount levels in Chain A.
- Optionally fill in Chain B for side-by-side comparison.
- View the net price, total savings, and single equivalent discount for each chain.
- Check the step-by-step waterfall to see how each level reduces the price.
- Use results to verify invoices or negotiate better terms.
Formula used
Net Price = List × (1 − d₁) × (1 − d₂) × … × (1 − dₙ). Single Equivalent Discount (SED) = 1 − ∏(1 − dᵢ). The product of complements gives the net cost factor; subtracting from 1 gives SED.Example Calculation
Result: Chain A: $1,282.50 (35.88% SED) vs Chain B: $1,288.00 (35.60% SED)
Chain A: $2,000 × 0.75 × 0.90 × 0.95 = $1,282.50, saving $717.50 (35.88%). Chain B: $2,000 × 0.70 × 0.92 = $1,288.00, saving $712.00 (35.60%). Chain A saves $5.50 more despite having a lower sum of rates (40% vs 38%).
Tips & Best Practices
- Chain discounts compound: each successive rate applies to a smaller base.
- The order of discounts doesn't affect the result — multiplication is commutative.
- Always compare chains using the Single Equivalent Discount, not the sum of rates.
- Verify every supplier invoice against the agreed chain — errors are common.
- Negotiate deeper first-level discounts; they have the biggest impact.
- Convert chain discounts to SED for easier comparison with flat-discount offers.
Chain Discounts in Procurement
Procurement teams routinely encounter chain discounts in supplier quotes. A quote of “List less 30/10/5” means three successive reductions. Smart buyers convert this to a single net cost factor (0.70 × 0.90 × 0.95 = 0.5985) and compare it against alternative suppliers offering different chain structures. The buyer who understands chain math negotiates from strength.
Common Industry Chain Structures
Industrial distribution often uses 40/10 or 50/10 chains. Building materials use 30/10/5. Office products use 25/15/5. HVAC equipment may use 50/10/10. The deeper first discount reflects the standard trade discount, while additional levels reward volume, loyalty, or promotional participation.
Sources & Methodology
Last updated:
Frequently Asked Questions
Because each discount applies to the already-reduced price, not the original. A 20% discount followed by 10% means: first 20% off the full price, then 10% off the remaining 80%. The second discount applies to a smaller base, so the total savings are less than 30%.
No. Mathematically, the result is the same regardless of order because multiplication is commutative. 20/10/5 produces the same net price as 5/10/20 or any permutation. The SED is always the same.
Multiply the complements (1 minus each rate): for 20/10/5, that's 0.80 × 0.90 × 0.95 = 0.684. The SED = 1 − 0.684 = 0.316, or 31.6%. This single rate gives the exact same net price as the full chain.
In B2B commerce, manufacturers use chains to give different discounts for different purposes: a trade discount for distribution, a volume discount for large orders, a promotional discount for marketing support, and a cash discount for early payment. Each layer can be adjusted independently.
Calculate the SED for each chain and compare. The chain with the higher SED saves more money. Don't compare by summing the rates — a chain of 30/5 (33.5% SED) beats 20/10/5 (31.6% SED) even though the sum is lower (35 vs 35).
No, never. Due to compounding, the actual SED is always less than (or in edge cases equal to) the sum of rates. The only exception is a single discount where SED equals the rate itself. With two or more rates, compounding always reduces the effective total.
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