Have you ever tried to build a formula to calculate discounts depending on price? The VLOOKUP function is much easier to use than nested IF functions.

You can also use the methods described in this article to calculate commissions, tariffs, charges, shipping costs, packaging expenses etc.

Table of contents

  1. Use price ranges to determine discount
  2. Linear discounts
    1. What is the formula above doing?
  3. Multiple tables
    1. Explaining array formula
  4. Two-way lookup in multiple cross reference tables
    1. Explaining array formula
  5. Download xlsx file
  6. Functions in this post

Use price ranges to determine discount

For this example our price range plan looks like this:

  • Total price between 0 and 100 returns a 5% discount
  • Total price between 100 and 300 returns a 7% discount
  • Total price between 300 and 500 returns a 8% discount
  • Total price between 500 and 1000 returns a 10% discount
  • Total price between 1000 and above returns a 15% discount

The picture below shows you the discount percentage table (B2:D7) and a summary table (B9:E19) with a calculated discount (E21).

The table above shows you the total amount of all items $1 332.60 in cell E20, the formula in cell E21 calculates a discount percentage. Since $1 332.60 is larger than $1 000 the formula returns 15%.

Cell E23 returns the discounted total.

Keep in mind, the values in the first column (B3:B7) must be sorted ascending. The third column (D3:D7) is not necessary for the formula calculation.

Formula in cell E21:

=VLOOKUP(E20,B3:C7,2,TRUE)

Formula in cell E22:

=E20*E21

Formula in cell E23:

=E20-E22

The following chart shows you the different discount ranges from table above.

Read on to learn more about linear discounts.

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Linear discounts

In this scenario we want to use a linear equation to calculate the discount percentage. It begins on 0 (zero) with 2% and climbs up to 15% on $2 000, shown in cell range B3:C4 on the picture below.

These four numbers are our two coordinates. A coordinate in a plane has two values, x and y. You can draw a line between two coordinates thus a linear equation.

Formula in cell E18:

=(C4-C3)/(B4-B3)*E17+(C3-((C4-C3)/(B4-B3))*B3)

You can verify the calculated discount value by looking at this chart.

What is the formula above doing?

A linear equation looks like this: y=kx+m where k and m are constants. k is the slope of the line and m is the y-coordinate where the line crosses the y-axis.

A linear equation consists of two coordinates, in this case (0,0.02) and (2000,0.15).

k is (y2-y1)/(x2-x1) or using cell refs (C4-C3)/(B4-B3), x is cell E17.

m equals y if x is zero or using cell refs C3-((C4-C3)/(B4-B3))*B3

y = kx + m becomes  (C4-C3)/(B4-B3)*E17+C3-((C4-C3)/(B4-B3))*B3

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Multiple tables

This example demonstrates how to use two different tables. The discount percentage depends on the category, the first table is category A and the second table is category B.

Formula in cell G11:

=VLOOKUP(E11,INDEX(($B$4:$C$7,$E$4:$F$7),,,MATCH(F11,{"A","B"},0)),2,TRUE)

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Explaining function in cell G11

You can easily follow the formula calculations, step by step.

  1. Select cell G11
  2. Go to tab "Formulas" on the ribbon
  3. Click "Evaluate formula" button

Click on "Evaluate" button to see next step in calculation, click OK when done.

Step 1 - Identify relative position of category in array

MATCH(F11,{"A","B"},0)

becomes

MATCH("B",{"A","B"},0)

and returns 2. B is the second number in the array {"A","B"}. In other words, the MATCH function converts the category to a number. The number determines which range to be used.

Step 2 - Choose cell range

INDEX(($B$4:$C$7,$E$4:$F$7),,,MATCH(F11,{"A","B"},0))

becomes

INDEX(($B$4:$C$7,$E$4:$F$7),,,2)

and returns $E$4:$F$7.  The INDEX function returns cell range $B$4:$C$7 or $E$4:$F$7 depending on the category. An entire range is returned because both row and column parameters are omitted.

Step 3 - Use cell range in VLOOKUP function and return corresponding discount percentage 

VLOOKUP(E11,INDEX(($B$4:$C$7,$E$4:$F$7),,,MATCH(F11,{"A","B"},0)),2,TRUE)

becomes

VLOOKUP(E11,$E$4:$F$7,2,TRUE)

becomes

VLOOKUP(1200,$E$4:$F$7,2,TRUE)

and returns 7%. The VLOOKUP function uses the selected range to retrieve the discount value from column 2 in the second table. Make sure the leftmost column in the tables are sorted descending.

Tip! This post explains how to use multiple conditions in a VLOOKUP function: 
Use multiple conditions in Vlookup

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Two-way lookup in multiple cross reference tables

This example shows you how to do lookups in multiple cross reference tables.

Formula in cell S3:

=INDEX(INDEX(($C$4:$G$8,$J$4:$N$8),,,MATCH(R3,{"North","South"},0)),MATCH(Q3,INDEX(($B$4:$B$8,$I$4:$I$8),,,MATCH(R3,{"North","South"},0)),0),MATCH(P3,INDEX(($C$3:$G$3,$J$3:$N$3),,,MATCH(R3,{"North","South"},0)),0))

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Explaining formula in cell S3

The INDEX function allows you to choose between different cell ranges depending on the region value in cell R3, if a value is present in the optional parameter area_num.

You can easily follow the formula calculations, step by step.

  1. Select cell S3
  2. Go to tab "Formulas" on the ribbon
  3. Click "Evaluate formula" button

Click on "Evaluate" button to see next step in calculation, click OK when done.

Step 1 - Identify which cell range to fetch data from, C4:G8 or J4:N8

The MATCH function lets you find out where in an array a value is located (relative position).

INDEX(($C$4:$G$8,$J$4:$N$8),,,MATCH(R3,{"North","South"},0))

becomes

INDEX(($C$4:$G$8,$J$4:$N$8),,,1,0))

and returns the first cell reference $C$4:$G$8.

Step 2 - Identify which cell range to search in, B4:B8 or I4:I8

INDEX(($B$4:$B$8,$I$4:$I$8),,,MATCH(R3,{"North","South"},0))

becomes

INDEX(($B$4:$B$8,$I$4:$I$8),,,1)

and returns $B$4:$B$8

Step 3 - Match value "D" in cell range $B$4:$B$8

MATCH(Q3,INDEX(($B$4:$B$8,$I$4:$I$8),,,MATCH(R3,{"North","South"},0)),0)

becomes

MATCH(Q3,$B$4:$B$8,0)

becomes

MATCH("D",$B$4:$B$8,0)

and returns 4. Now we now the row number to use.

Step 4 - Find column number

The steps to look for the column number is almost identical to finding the row number.

MATCH(P3,INDEX(($C$3:$G$3,$J$3:$N$3),,,MATCH(R3,{"North","South"},0)),0)

becomes

MATCH(P3,INDEX(($C$3:$G$3,$J$3:$N$3),,,1),0)

becomes

MATCH(P3,$C$3:$G$3,0)

becomes

MATCH("G",$C$3:$G$3,0)

and returns 2.

Step 5 - Return value from intersection of a row and column number

INDEX(INDEX(($C$4:$G$8,$J$4:$N$8),,,MATCH(R3,{"North","South"},0)),MATCH(Q3,INDEX(($B$4:$B$8,$I$4:$I$8),,,MATCH(R3,{"North","South"},0)),0),MATCH(P3,INDEX(($C$3:$G$3,$J$3:$N$3),,,MATCH(R3,{"North","South"},0)),0))

becomes

INDEX($C$4:$G$8,4,2)

and returns 63.

You can easily modify the formula to search simultaneously in 4 different cross reference tables.

Example:

Formula in cell S3:

=INDEX(INDEX(($C$4:$G$8, $J$4:$N$8, $C$12:$G$16, $J$12:$N$16), , , MATCH(R3, {"North", "South", "West", "East"}, 0)), MATCH(Q3, INDEX(($B$4:$B$8, $I$4:$I$8, $B$12:$B$16, $I$12:$I$16), , , MATCH(R3, {"North", "South", "West", "East"}, 0)), 0), MATCH(P3, INDEX(($C$3:$G$3, $J$3:$N$3, $C$11:$G$11, $J$11:$N$11), , , MATCH(R3, {"North", "South", "West", "East"}, 0)), 0))

Tip! Read this post to do Reverse two-way lookup in a cross reference table.

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Download excel *.xlsm file

VLOOKUP discount percentagesv2.xlsx

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Functions in this post:

VLOOKUP(lookup_value, table_array, col_index_num,[range_lookup])
Looks for a value in the leftmost column of a table, and then returns a value in the same row from a column you specify. By default, the table must be sorted in an ascending order.

INDEX(array,row_num,[column_num],[area_num])
Returns a value or reference of the cell at the intersection of a particular row and column, in a given range

MATCH(lookup_value, lookup_array, [match_type])
Returns the relative position of an item in an array that matches a specified value

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