![]() buying shampoo and conditioner at the same time, or.It can also be a good way to move less popular or old stock by bundling it with something that customers see more value in.įor example, a beauty salon could offer bundled pricing for things like: ![]() Packaging or bundling stock encourages customers to order more stock or services to be rewarded with a bundled pricing.īundling works when the customer can see the benefit of complementary products or services and buying them together at the discounted price. This could be a percentage or set amount, such as $10 off a product or 20% off selected products.īut if traditional discounting isn't working to drive sales, there are other options you can offer that might be more successful – such as free shipping or gift wrapping. The most typical type of discounting strategy is a special offer or pricing deal. When choosing your discounting strategy, it's important to understand your customers and what offers they will be attracted to. Current gross marginĭepending on your business and customer base, you might choose to offer a: The sales increase needed to counter the effect of discounts on your gross margin. In the following table, you can use your gross margin figure (top row) to see how much your sales volume will need to increase (middle cells) when using different discount amounts (in the left-hand column).įor example, if your gross margin is 40% and you decide to discount your goods or services by 5%, you'll need to increase your sales volume by 14.3% to make a profit. To successfully run a sale without making a loss, you need to know your gross margin, markup and breakeven figures so you can work out how the discounted price will affect your profit. Whenever you change the sales price (and markup) of your goods and services, it's important to understand how it will affect your profit margins and sales targets. How discounting affects your sales targets Review your accounts for any regular times of the week, month or year that your business has a sales dip.Decide how long the sales price will be offered.Review other options for promoting sales offers without reducing the price.Find out what your competitors are offering and their current pricing.Prepare a marketing plan to encourage new customers and bring inactive customers back.Calculate the best discount price to still make a profit.Know your current profit margin, markup and break-even point.reach sales targets during a slow sales periodĭiscounting can attract more business but can also decrease your profits.īefore you cut your sales price, do some planning to make sure you'll still make a profit on the extra orders coming in:.Discounts, loyalty offers and bulk buy pricing are common business practices that can help you:
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