How to give discounts without harming yourself?

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The fear of losing money makes many e-commerce businesses give up on offering discounts to customers. However, when price reductions are done correctly, it is possible to sell more and gain a competitive advantage without compromising profitability. Therefore, this initial fear can be overcome with good planning.
There are several ways to implement a discount policy. For example, offering discounts for a limited time to create a sense of urgency and encourage immediate purchase (24-hour discounts or flash sales).
In addition, progressive discounts based on the volume of products purchased. For example, a 10% discount for purchases over $100 and a 20% discount for purchases over $200. Another idea is to create exclusive promotional codes that customers can enter on the website during checkout to receive a specific discount.
It can also work to send special discounts to customers who abandon their shopping cart on the website as a way to encourage them to complete the purchase. Offering discounts on specific product categories to boost sales is another way to achieve good results without compromising your profit margin.

What is discount policy?
Discount policy is a pricing strategy used by companies kazakhstan whatsapp lead to encourage the sale of products or services, usually by offering reductions in the sale price. This can be applied in several ways and with different objectives, such as increasing sales, attracting new customers, encouraging customer loyalty, reducing inventory, among others.
Below, we will look at some types of discounts.
By quantity: Offered when the customer purchases a certain quantity of products.
Seasonal: Granted during specific periods of the year, such as Christmas promotions, Black Friday, Valentine's Day, Mother's Day, among others.
Cash payment: Offered when the customer pays for the product or service in full at the time of purchase.
By package: Granted when the customer purchases a set of products or services combined, usually at a lower price than if they were purchased separately.
By loyalty: Offered to customers who buy frequently from the company or who maintain a long-term relationship, such as discounts for VIP customers or loyalty programs.
Customer category: Granted to specific customers, such as seniors, students, among others.
To clear stock: Offered to speed up the sale of products that are experiencing low turnover or are being discontinued.

Benefits of giving discounts in e-commerce
Offering discounts on your e-commerce site can bring a number of benefits to both your customers and your business. Attractive discounts can attract new customers to your e-commerce site, encouraging them to make their first purchase. They
can also encourage them to buy more products, increasing your average purchase price. Offering discounts on specific products can help promote items that need a boost in sales or are overstocked.
This can help you build a solid base of satisfied customers who are more likely to recommend your e-commerce site to friends and family. Recurring discount programs or discounts for loyal customers can encourage them to return to your site for repeat purchases.
In a competitive market, this strategy can help your online store stand out and compete with other online retailers. Without a doubt, discounts can be an effective way to clear out old or seasonal inventory, freeing up space for new products.
Discounts can also be a powerful incentive for customers to complete a purchase, especially if they abandon their cart on your site. In fact, this strategy tends to improve customers' perception of your brand, showing that you value them and are willing to offer them advantageous deals.

How to give discounts
To offer discounts without harming yourself, you need to analyze the current situation of your business. Some aspects to consider are your sales history, best-selling products, most sought-after products, and most profitable products, for example.
Check out some important steps you should follow below.

Know your profit margin
First of all, you need to know what your profit margin is for discounting. So, have detailed information about your revenue and the costs associated with operating your business. The calculation is as follows:
Profit Margin (%) = [(Total Revenue – Total Costs) / Total Revenue] x 100
Here’s how you can calculate each of the components:
Total Revenue: Add up all the revenue generated by your business in a given time period. This includes money received from selling products as well as any other sources of revenue.
Total Costs: Add up all the costs associated with operating your business during the same time period. This includes variable costs like cost of goods sold, direct labor expenses, shipping costs, etc., as well as fixed costs like rent, salaries, utilities, marketing, etc.
Once you have calculated your total revenue and total costs, you can apply the above formula to find your profit margin as a percentage of total revenue. For example, if your business’s total revenue for a month was $50,000 and its total costs were $40,000, then:
Profit Margin (%) = [(50,000 – 40,000) / 50,000] x 100 = (10,000 / 50,000) x 100 = 0.2 x 100 = 20%
This means that your business’s profit margin was 20% for the period under consideration. In other words, for every $1 of revenue generated, the business made a profit of $0.20 after covering all associated costs.

Respect your cash limit
It is important to keep a detailed record of all your cash inflows and outflows. This includes sales, customer payments, operating expenses, payments to suppliers, cash withdrawals, and any other financial transactions related to the company.
To help, adopt an accounting management system that is appropriate to the needs of your company, depending on the size and complexity of its operations. In fact, automated tools always speed up the process and reduce errors.
Business management software offers automation features for data import, bank reconciliation, report generation, invoice issuance, inventory control, among other functionalities.
Therefore, perform periodic analyses of your company's cash flow and financial performance. This will help you identify trends, detect potential problems, and make informed decisions to improve financial management.


Applying the discount policy to your website
Implementing an effective discount policy on your website is a powerful strategy for attracting and retaining customers, driving sales, and increasing customer loyalty.
It’s important to monitor and analyze the performance of each discount strategy to determine its effectiveness and adjust as needed. Also, remember to clearly communicate the terms and conditions to customers to avoid misunderstandings.
Here are some tips.

Prioritize stranded products
Offer discounts on specific product categories to boost sales. For example, on products that are stranded or close to their expiration date. Offer bigger discounts on products that are not in stock. This way, you can free up more space in your inventory and avoid losses due to obsolescence or deterioration.

Know how to negotiate
When offering discounts, it is also important to understand the behavior of different types of customers when making a purchase. Know how to deal with each consumer profile to negotiate intelligently and assertively.

Marketing strategies to promote your actions
Once you have decided on your discount policy, you need to publicize it to attract customers’ attention. To do this, establish digital marketing strategies to promote your offers. Use different channels such as social media, email marketing , and your own website. Additionally, invest in paid ads on Google, Facebook, and Instagram.

Rewards and discount strategies for loyal customers
Rewards should be defined based on customer profiles and preferences, without compromising your profit margin. Loyalty programs, for example, are a strategy in which customers earn points for each purchase, which can be exchanged for future discounts or rewards.
Another way to reward your customers is when they refer friends or family members who make purchases on the site, thus receiving referral discounts. In addition, it is a good idea to offer special discounts to new customers as an incentive to make their first purchase. This can include discounts on the entire store or on specific products.

Conclusion
Finally, discount policies are an important marketing and sales tool, as they can attract customers, increase sales volume, generate additional revenue and improve your company’s competitiveness in the market.
However, they must be carefully planned and managed to ensure that they do not compromise your business’ profitability or negatively affect the perceived value of your website’s products.
Therefore, it is important to regularly monitor your profit margin to ensure that it is sustainable and to identify opportunities for improvement in operational efficiency and financial performance.