Friday, April 19, 2019

5 Reasons why Businesses Should Offer Discount: +1 Discount Calculation Tip

by johnkelvin318 (writer), , October 26, 2018

How do you calculate discount, so that it’s a win-win for you and your clients?

Providing potential consumers discount on purchases is a great way to draw them into your shop. Anytime you tell a client that they can save money, you are likely to get their attention. In addition to attracting customers, discounts also play a crucial role in helping your business increase sales, improve reputation, clear inventory and save money.

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As a business owner who is keen on growing their business, you will at some point, want to offer your clients some form of discount. For a long time, companies have been using discounts as a short-term and occasional strategy to boost sales. Consumers are inherently attracted towards affordable items – when presented with two products having the same features and functionality; they will often always go for one that costs less.

Discounts are a great way for you to maintain customer satisfaction and even draw in more consumer base. They also are an excellent method for offsetting behind-the-scenes costs associated with production, ordering and acquiring economic resources. Knowing this, the question then becomes, how do you calculate discount, so that it’s a win-win for you and your clients?

Calculating discounts

The easiest way to know how much a discount is worth is by using a discount calculator. Discount calculators are designed to help you remove the hard work from the process. They are as straightforward as keying in the original price and the discount percentage. These calculators allow you to determine the reduced priced as well as the amount of money you get to save.

You may also calculate discount by hand, using this formula

Discounted price = Original price – Discount

Where discount is the product of the discount rate and the original price, meaning

Discounted price = (Original price – (Discount rate x Original price))

Types of discounts

There are different types of discounts from sales that consumers can earn. Here are some examples:

Buy one get one free: This is where a customer receives two similar products or a free inventory item that differs from the original purchase. This discount is perfect if you are trying to clear out inventory, or when the gross margin on a product is high enough to generate enough profit for your business.

Seasonal discount: A discount can be provided at specific times of the year when sales are slow. For instance, a flight company might offer low prices during off-peak seasons when fewer people are traveling.

Price-break discount: A client may qualify for a price reduction on an order if the items that they’ve bought surpass a threshold amount. In such cases, the discount is applied as soon as the order is placed.

Free shipping: This is where you offer free delivery when a client orders within a specified period or uses a discount code.

Other examples of discounts include trade-in credit, order-specific discounts, volume discounts, contractual discounts, early payment discounts, and trade discount.

Here are the top five reasons why businesses should offer discounts:

1. Attract customers

Since people love purchasing things on sale, discounts act as a tactic to draw them into your store. If the discount only runs for a few days, be sure to mention that when you advertise the discounted products. Often, people will make it a priority to visit your store if they know they only have some days to take advantage of the sale. Keep in mind that your store will have more clients coming in, so, during this time, you should have more employees available to offer exceptional services, so that the clients come back.

2. Increase sales

Of course, if you have more people coming in to look around, you are likely to make more sales than on an average day. Since discounts draw in more consumers, you are likely to get clients who want to buy other items in your store. For instance, if your boutique is offering discounts on all jeans selection, clients may also purchase other clothing accessories and items like shirts, belts, and shirts.

3. Clear inventory

Discounting products allows you to clear old stock for the new one. Old items may lie around for months, or even years; but when you discount them; you increase the likelihood of selling them, in the process, creating room for new products.

4. Improve your reputation

Providing discounts is a great way to boost the consumer perception of your business. If clients believe that you’re delivering good value for money, they’re likely to trust the solutions you are offering. Developing this relationship with clients is essential to customer satisfaction and retention.

5. Meet sales target

Most businesses have yearly, quarterly, monthly and weekly sales targets. Given the seasonal variations of customer buying habits, you can take care of the low seasons by providing discounts. This way, you’ll manage to meet your sales goal in every season regardless of what your predictions show.


As you may realize, discounts play a crucial role in helping your business grow. However, it can be impossible to recognize all the benefits of discounting your inventory if you don’t approach the process with the right strategy.

You’ll need to familiarize yourself with discount calculations, so you can know how much a particular discount is worth. You also have to master the art of displaying your products and services to get the most of your discounts. Last but not least, you need to work on your customer care skills, to ensure that all prospects become return clients.

About the Writer

johnkelvin318 is a writer for BrooWaha. For more information, visit the writer's website.
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