It’s Easy to Offer Discount for Profit
One of the best forms of increasing sales or closing a sale is to discount your product or have a sale. Offering discount for profit either in the form of loyalty offers, special promotions or bulk buy pricing are common business practices that can effectively help you move stock, attract new customers or reach sales targets during off-peak season. Ensure your original price always has enough leverage to discount it enough to be attractive to close the sale or run a sales promotion. You should do this at the outset of establishing you price. Your pricing formula should include: cost of goods, profit margin, GST and now sale margin. It is also important to plan your sale so you link it to the buying cycle of your industry. When are the traditional high and low buying times for your product or services and what are your marketing philosophies around offering.
Discount for Profit with Planning
Proper planning goes a long way, especially when it comes to slashing prices of your goods and services. Don’t get overly excited about moving your stock rapidly as the endgame is to ensure that you’re still making a profit from this sales strategy!
- Have a talk to your accountant and decide on what your breakeven point is. Your finance expert can then assist you in deciding the mark-up percentage so you can still achieve your profit margin. (Calculator Soup also provides free sales calculators that can help you figure out these numbers out online!)
- Based on the profit margin, you can now calculate the best price possible for your goods and services, effectively allowing you to run a discount for profit campaign at no loss.
- A bargain is not a bargain without lines of customers and manic purchasing! Get your marketing and sales team together to create a sensational drive inviting prospective, current and inactive customers back to your gym or fitness club.
- Before you set your marketing plan in place, take a stroll around the block and find out what else is going on in that neighbourhood. How are your competitors currently positioning themselves and what are their price offerings?
- Some items may already be at basement pricing, so implementing discount for profit may not be possible. In this case, review other sales strategies which do not require price reduction. (e.g. buy one regular priced item, 50% off second item)
- Like marketing campaigns, sales campaigns must also have a dateline. You can then gauge the effectiveness of the campaign and switch strategies (if necessary).
Finally, make it a habit to review your accounts on a weekly basis so you can decide when to have another discount for profit drive again.