4 Proven Ways to Set Product Discount

Today, I'm going to share with you some discount strategies you can use in making sales and give you the easiest way to calculate discount prices.

Here you'll learn tons of business tips and how-to's to help you scale, so if you don't want to miss out, be sure to subscribe.

Alright… let's begin…

What first comes to mind when you want to sell more or make a profit?🤔

Discount right…. Yeah…it's common😉

Offering discounts has been one of the most popular strategies small or large business owners do to make sales, get new customers, and make a profit. 

If you haven't tried it, you should, but before you get too excited, there are a few things you need to know.

The desire to make more sales is normal for sellers, but one mistake you shouldn't make is giving a discount before understanding how it works. This is because of the possibility that you won't gain any or enough profit.

Discounts can determine your profit and also help you attract customers. As exciting as it is, it can ruin you when not done properly. 

Here's what I mean,

Imagine offering a discount of 1500 on a product whose selling price was 7000. Although people will buy it, two outcomes are likely to happen.

• Either the customer who paid the original selling price will be upset that they paid such a high amount and won't want to buy from you again thinking you were not honest about your price, or
  
• You run at so much loss just trying to please customers.

Discount is not something you magically set on a product and Boom!... SALES!!!

Instead, it is something you sit down to understand the market and know what you want to achieve after sales before trying it out. You may say, " I don't need to. I have run my product on discount before and it turned out great," but maybe it wasn't great the way it should be.

Giving discounts isn't just about making more profit; there's more to that.

I'm going to show you the different strategies you should use to set your discount and how to set a discount price.

But before that, let's see what discount means.

DISCOUNT

As we all know, a discount is the reduction of the amount of a product. As much as it makes your customers feel good about your business, it can make them leave.

So, first and foremost, you should always have a goal and set objectives before deciding on a discount price for your product.

• Are you doing it for the sake of having new customers?
• Rewarding or acquiring current customers?
• Increase your sales or get rid of old inventory?

And then know the different approaches (strategies) you can take to achieve these goals.

Discount Strategies

Select the kind of pricing discount that complements your sale or discount once you've determined your goal Here are some common discount strategies. Always keep in mind that you don't have to select one strategy at a time. For the same promotional deal, you can apply a variety of discounts.

Bundled Discount

This tactic increases buying decisions like magic. I call it the Combo. With this technique, you bundle some goods together and reduce the price rather than lowering the selling price of one item or service.

If you run a boutique, for instance, you could combine together the gown, a bag, and a pair of slippers and then set your discount price on those grouped things rather than having a discount price on just the gown as you know consumers will always require a purse or shoes.

Free Shipping

Another way is to offer free shipping delivery to your customers without losing any money. You can call it a "free shipping day". There are various ways to accomplish this:

• Add the cost of the shipping fee to your product price without your customers knowing they are paying for it.
• Free shipping can be used to gain loyal customers. By using it to reward them, you will only be sponsoring the delivery for your loyal customers. Also, you can give them on special occasions like Christmas or Valentine's Day. It motivates them to buy from you next time.
• Offer free shipping fees to get rid of old inventories.

This strategy encourages clients to make larger purchases.

Seasonal Discount
This tends to happen around a specific period. You can use it to run Christmas sales, Valentine's sales, anniversary sales, etc.
During this period, people tend to have the mindset of buying, so you can use this opportunity to give offers, deals, or discounts and acquire new customers.

BOGO

We all enjoy receiving free items, thus this is recognized as the Buy One Get One Free offer. In other words, this approach encourages buyers or customers to buy without hesitation. It's just like getting rewarded for buying your own thing.

All of these tactics can be used as guides to help you achieve your objectives.

The majority of top sellers have tested them out and provided positive reviews.

It's all up to you to find out what works best for you and try out as many strategies as possible.

After knowing your strategies, the next thing is for you to understand how to set your discount price.

How to calculate discounts

What I'm about to show you right now is one of the easiest and quickest ways to calculate discounts.

However, discount can be calculated either by

• Amount/fixed price - Reduce the selling price by any amount you choose. For example, if a shoe is sold for 5000, you can give an N500 discount, which means you will be selling that product for 4,500.
  
• Percentage - This means that you're calculating your discounts by percentages. This is the most common and basic way to calculate a discount.
  
  For example, you might want to calculate the sale price of a pair of shoes you bought for N3000 with your profit of N2000. That's the N5000 selling price.
  If the shoes are 25% off, you need to convert 25% to a decimal.
  That is, 25% = 0.25
  
  Multiply the normal selling price by the percentage
  5000 x 0.25 = 1250
  
  Subtract your selling price into your discount price
  5000 - 1250 = 3750
  
  So, the N5000 shoes are on sale for N3750.

Note this: Do not just guess your percentage discount because it may be lower than your selling price e.g. 50% of your selling price is 5000 × 0.50 = 2500

5000 - 2500 = 2500 

which is lower than your purchase price. This is a lot of loss.

And that's all

Conclusion

No matter the decision you take at this moment, always remember to set your goals before offering a discount price. If you do this correctly, your sales could grow by 50% or even 100%, which could be the best thing that has ever happened to you.