I add a free gift to every order; why won't the calculator give me a margin for it?

What the calculator shows for the gift alone

You put a small perfume sample costing 15 into every order. Enter it in the Profit margin calculator as its own item with a cost of 15 and a price of 0:

Each figure is correct. The loss of 15 is what each gift costs you. The markup of -100% says you 'sell' at a full discount on cost. Margin does not exist because there is no sale at all. A gift is not a product to measure by margin; it is a cost that lands on another product.

The right calculation: add the gift to the order's cost

1. Pick the product the gift ships with, or your average order if the gift goes in every order.
2. Enter its cost and price once without the gift.
3. Then add the gift's cost to the cost field and leave the price unchanged.
4. The gap between the two margins is the gift's real price in percentage terms.

Is the gift worth that?

The calculator tells you the price precisely; the decision depends on what the gift brings back. If the sample makes customers return for the full size, it may be cheaper than an ad that finds a new buyer. If it is a habit nobody notices, you are giving away a quarter of your profit for nothing.

• Try a cheaper gift: a sample costing 6 instead of 15 changes the result a lot. Enter it and compare.
• Make the gift conditional on a minimum order value, so it goes on the orders that can carry it.
• Compare the gift with a discount of the same value. Taking 15 off a price of 129 has the same effect on profit, and the Discount calculator gives you its percentage. Which would your customers value more?

Count what comes with the gift

A gift costs more than its purchase price. If it needs a small pouch or a printed thank-you card, add those to the figure before you put it on the product's cost.