This week, we thought it would be helpful to go over the pros and cons of discount pricing.
With the Fourth of July comes guaranteed discounts and deals from many businesses.
Consumers are always excited and hold off on buying because they are expecting these deals, but what does this mean for a business? That’s why, this week, we thought it would be helpful to go over the pros and cons of discount pricing.
To begin, we will talk about the pros of discount pricing. First of all, discounts are a way to drive sales. Consumers like finding the best deals, so having products that cost less will draw them to your business. Discount pricing is also a great way to attract customers. They would originally be drawn into your website with the discount and then see all the amazing products you have to offer, leading to a potential increase in future sales. Finally, another advantage of using discounts is that you can clear out products that you want to be rid of. This is especially true if you are selling season specific items.
In contrast, discount pricing can have disadvantages. Most obviously, you won’t be making as much money as you would selling your product at full price. You need to make sure you can afford having discount prices before setting them. Another potential issue is that you are only attracting one-time customers who are looking for a good bargain instead of a specific business to buy from. This can hurt a business by making them easily forgettable. Similarly, discounting your products can take the focus off your business’ mission because you’d be drawing attention to your prices.
Now that you know the advantages and disadvantages of using discounts, you can decide whether they are a right fit for you! You can make the best decision for your business by analyzing your target audience, products, and business model.
Until next time, let us know if you have any questions or comments below!
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We are a partner. We aren’t here to offer quick bridge loans. Instead, we work together for at least a year, funding 100% of your inventory needs.