A Black Friday discount floor is the lowest price at which a SKU still covers every variable cost it carries during the holiday period, plus the contribution you insist on keeping. You find it by adding up the per-unit dollar costs (landed COGS, the peak fulfillment fee, ad cost per unit, a return allowance, any upfront promotion fee spread over expected units), then dividing by one minus the percentage fees. Price below that number and each extra order makes the month worse. Every SKU gets its own floor, and the floor moves by channel.
Most sellers set the discount first and check the margin in January. Reverse the order.
A 25 percent sitewide promotion treats a $12 accessory and a $60 hero product as if they carried the same cost structure. They do not. The accessory might pay a fulfillment fee equal to a third of its price, while the hero product absorbs its fee easily but carries the heaviest ad spend. One percentage applied to both guarantees that at least one SKU sells below its floor, and revenue reports will hide which one.
The holiday period also changes the cost side. Amazon's Holiday 2026 announcement in Seller Central, posted in July 2026, states that holiday peak fulfillment fees apply from October 15, 2026 to January 14, 2027, at the same per-unit increase over non-peak rates as last year, averaging $0.32 per unit, with the 3.5 percent fuel and logistics surcharge applied on top. The same announcement sets Black Friday Week and Cyber Monday deal fees at $100 per promotion plus 1.5 percent of promotional sales, with the variable portion capped at $5,000. A floor calculated on September costs is too low for every unit you ship during the event.
Write the per-unit costs in two groups.
Then:
Floor price = (dollar costs + target contribution per unit) / (1 minus percentage costs)
Set target contribution to zero and you get the true breakeven price. Set it to the dollar margin you need to justify the inventory and the cash tied up through January, and you get a working floor.
Illustrative numbers. Take a seller with a Home and Kitchen SKU listed at $39.99 on Amazon, sold through FBA. The referral fee for Home and Kitchen is 15 percent, per the referral fee table on sell.amazon.com/pricing as checked in October 2026. The fulfillment fee below is illustrative and includes the peak increase and the surcharge; pull your own figure from the Revenue Calculator or the Fee and Economics Preview Report in Seller Central.
Dollar costs per unit:
Total dollar costs: $21.45.
Percentage costs: 15 percent referral plus 1.5 percent variable deal fee, 16.5 percent in all, so the divisor is 0.835.
Breakeven floor: $21.45 divided by 0.835 equals $25.69. Check it: $25.69 minus 15 percent ($3.85) minus 1.5 percent ($0.39) minus $21.45 leaves zero, rounded to the cent. The deepest discount this SKU can take without losing money on each deal unit is $39.99 down to $25.69, or 35.8 percent.
Now require $3.00 of contribution per unit, which is a modest ask for a product that took four months of inventory financing to get into the building. Floor: $24.45 divided by 0.835 equals $29.28. The maximum discount falls to 26.8 percent. A store-wide 30 percent off sits below that floor.
For comparison, at the full $39.99 with no deal fee, the same unit contributes $39.99 times 0.85, which is $33.99, minus $21.20 of dollar costs, for $12.79. A 26.8 percent discount gives up $9.79 of contribution per unit. The promotion pays only if it sells enough extra units to make up the difference, which is a separate calculation, and the one most sellers skip.
The floor changes when the channel changes. Illustrative numbers again, for the same product sold through a Shopify store and shipped by a 3PL.
Dollar costs: $19.50. Percentage cost: an illustrative 2.9 percent payment processing rate; use the rate on your own plan.
Breakeven floor: $19.50 divided by 0.971 equals $20.08. With $3.00 of target contribution: $22.50 divided by 0.971 equals $23.17.
The Shopify floor sits $5.61 to $6.11 below the Amazon floor for the identical product, almost entirely because there is no 15 percent referral fee. That gap is an argument for running the deeper discount on your own store and a shallower one on Amazon. It is also a warning: if your Shopify ad cost per order doubles during the event, which is common when every brand bids on the same audiences, the floor rises by $2.57.
The units shipping on Black Friday came from a specific purchase order. If that PO landed with higher freight or a new tariff rate, its landed cost is higher than the average in your spreadsheet. FIFO costing tells you which layer is selling. A floor built on last year's average cost is a floor built on units you no longer have. The four different costs one SKU can carry explains how the gap appears.
ACoS divides ad spend by ad-attributed sales. Your floor needs ad spend divided by all units sold, because that is what each unit has to carry. On a SKU with strong organic sales the per-unit figure is lower than ACoS implies. On a launch SKU it is higher.
Amazon's 2026 extended holiday returns policy, announced on Seller Central in October 2026, lets items purchased between November 1 and December 31, 2026 be returned until January 31, 2027. Your Black Friday return cost will not finish arriving until February. Use last year's holiday return rate for the SKU, not this year's October rate.
A packaging change can move a product into a heavier size tier. The fulfillment fee on the settlement is the one that counts. Pull it from recent settlements, not from the listing page. The full fee walk is in true Amazon profitability after every fee.
You need one row per SKU per channel with six columns: landed cost of the current FIFO layer, peak fulfillment or 3PL cost, expected ad cost per unit, return allowance, percentage fees, and target contribution. The first four should come from reconciled data, not from memory.
ConnectBooks reconciles the transactions, fees, and returns in each Amazon settlement and syncs them to QuickBooks or Xero, as summarized entries or item-level detail. COGS runs on FIFO with landed cost allocated, and SKU-level profit reporting shows what each product netted after fees in prior periods, including last year's holiday weeks if you were on the platform then. That is where the return allowance and the real fee per unit come from.
After the event, the comparison report lets you set the Black Friday period against the prior period and see whether each SKU's discount bought enough extra volume to beat its full-price contribution.
The floor answers one question: below what price does each extra unit lose money? It does not say whether you should discount at all. A SKU with slow sell-through and aged stock might deserve a price below its accounting floor, because the COGS is already spent and storage fees keep running. A SKU that would sell out at full price deserves no discount. Those are separate decisions, and the floor is the input to both.
Set it before the event. Every SKU, every channel, in writing. When someone proposes 40 percent off at 11 p.m. on Thanksgiving, the sheet answers.
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