BOGO vs Percentage Off: Which Costs Less?

At the same real discount, BOGO usually costs less than a percentage off. A percentage off discounts every order, including the one-unit orders you would have made anyway. BOGO only discounts orders with two or more units. But buy one get one free is 50% off the pair, so it can cost far more than a modest percentage off.

This post compares the two with example numbers you can swap for your own. For BOGO setup steps, see how to set up buy one get one free on Shopify. For every bundle type, see the product bundles guide.

What is the real discount of each offer?

Convert every offer to a real discount on what the customer takes home. The headline number often hides it:

So “buy 1 get 1 50% off” and “25% off” give the same price on a pair. “Buy 1 get 1 free” and “50% off” do too. The difference is what happens on orders of one unit, and that is where most of the cost hides.

Who gets the discount with each offer?

A discount has two kinds of buyers. Some were going to buy anyway. Others buy because of the offer. The first group is pure cost, so the cheaper discount is the one that pays them less.

• Percentage off pays every buyer. A shopper who came for one item at full price now pays 25% less for it.
• BOGO only pays shoppers who take the extra unit. A shopper who wants one item and doesn’t add the second pays full price.

That is the main reason BOGO tends to cost less at the same depth. It asks the shopper to do something, buy more, before they get the discount.

What does each discount cost you per order?

Here is an example with made-up numbers. Say a product sells for $40. It costs you $14 per unit, and $8 to pack and ship one unit or $9 for two in one box. Payment fees are left out to keep it simple.

Two things stand out. On a pair, buy 1 get 1 50% off and 25% off earn exactly the same. On a single unit, the percentage off gives away $10 and the BOGO gives away nothing.

What does a free unit really cost?

Less than its price tag, if the customer only wanted one. Look at the one-unit column again. A shopper who would have bought one item now takes a free second one. You lose $15: the $14 unit plus $1 of extra shipping, not the $40 retail price.

Cost of a free unit to a one-unit buyer = unit cost + extra packing and shipping

Cost of a percentage off to the same buyer = price x discount %

So for one-unit buyers, BOGO free costs less than 50% off whenever the unit costs you less than half its price. With a high markup, it can even cost less than 25% off. A $40 product that costs you $6 loses $7 on a free unit, against $10 for 25% off.

The catch is shoppers who would have bought two anyway. For them, the free unit costs its full retail price: $40 in this example, against $20 for 25% off.

Which discount costs less across all your orders?

It depends on your order mix. Say a normal week brings 100 orders of this product: 80 orders of one unit and 20 of two. Baseline profit is 80 x $18 + 20 x $43 = $2,300.

Now apply each offer to those same orders, before any new demand. The cost is what you give to people who would have bought anyway:

The math behind the cost column:

• Buy 1 get 1 50% off: 20 pairs x $20 = $400. The 80 single orders pay full price.
• 25% off: 80 singles x $10 + 20 pairs x $20 = $1,200.
• Buy 1 get 1 free: 80 singles x $15 + 20 pairs x $40 = $2,000, if every single buyer takes the free unit.
• 50% off: 80 singles x $20 + 20 pairs x $40 = $2,400.

In this example, the half-off second unit is the cheapest offer by far. Buy one get one free and 50% off only make sense as clearance, where you would discount the stock anyway. Run the same table with your own costs and order mix. For the break-even formula on a plain percentage, see bulk discount pricing: the margin math.

When does a percentage off cost less than BOGO?

When the BOGO is deeper, or when BOGO doesn’t fit how people buy. Compare the offers you would really run, not equal depths:

Check one more thing before you choose: how many orders already contain two or more units. Export your orders from the Shopify admin and count them. If that share is high, keep any BOGO soft, such as the second unit at 50% or 30% off.

Do shoppers respond better to BOGO or a discount?

Often, getting more feels better than paying less, even when the math is equal. A 2012 study in the Journal of Marketing by Chen, Marmorstein, Tsiros and Rao found that shoppers often preferred a bonus pack over an economically equivalent price discount. In their retail field test, the bonus pack sold substantially more volume.

The authors explain it as “base value neglect”. Shoppers misjudge percentages because they ignore what the percentage is a share of. A bonus pack is extra product in one package, not two separate items, so treat this as a reason to test, not a promise.

You can test framing without changing the cost. “Buy 1 get 1 50% off” and “2 for 25% off” are the same price on a pair. Run one for two weeks, then the other, and compare orders and profit.

How do you set up each discount on Shopify?

Both work natively. In the Shopify admin, go to Discounts and click Create discount:

• Percentage off: choose Amount off products, select Percentage, and enter the value. Under Applies to, pick specific products or collections, or leave it for all eligible products. Minimum requirements can set a minimum quantity of items (Shopify Help Center).
• BOGO: choose Buy X get Y. Shoppers must add the free or discounted item to the cart themselves. Our BOGO setup guide walks through every field and its limits.

With a native BOGO, nothing shows on the product page, so shoppers who don’t read your banner add one item and miss the deal. That hurts the offer you picked because it costs less.

How do you run both in Sam Bundles?

Sam Bundles, our bundle app, shows the offer next to the add to cart button and applies it as an automatic Shopify discount. Customers don’t enter a code. Two templates map to this comparison:

• Buy X, get Y (BXGY) deal: each bar sets the Buy quantity and price, and the Get quantity, price type and Discount per item. 100% off makes the item free, 50% off gives you the half-off second unit. See set up a buy X, get Y offer.
• Quantity breaks for the same product: each bar has a Quantity and a Price: Full price, Percentage off, Amount off or Fixed price. A bar of 2 at 25% off is the percentage version of buy 1 get 1 50% off. See set up quantity breaks.

Keep a 1-unit bar at full price if you want single buyers to pay full price. Then, under Advanced, decide which Discount combinations the offer allows. A sitewide code on top of a BOGO can push an order below cost. Use Schedule with an end date for short sales. Both cards are in offer settings.

How do you check which discount cost less?

Compare profit per order, not revenue. After each offer has run for a similar period, check:

1. Profit per order with your real unit, packing and shipping costs.
2. Share of orders with two or more units, before and during the offer.
3. Single-unit orders. Did they drop, or did buyers keep buying one at full price?
4. Units left in stock, if the goal was clearance.

The Sam Bundles dashboard shows additional revenue, orders and AOV increase for each offer. It doesn’t know your costs, so run the profit check with the tables above. To find the deepest discount you can afford in the first place, use our bundle pricing strategy formula.