One day an item is $40, the next day it’s discounted at $25! Why? Why do businesses offer discounts? Could they have originally sold at the discounted price but just chose not to do so? As a small business, should you bother with discounts? If you should, why should you? We’ll attempt to answer these questions by exposing 5 Little-known Secrets of Small Business Discount Sales.

Business Discount Sales as an “Old Stock Clearance” tool

5 Little-known Secrets of Small Business Discount Sales

When a business especially a small business, buys stock to sell, capital is tied down in that process. For business to be successful, money needs to be recycled as often as possible i.e, you buy, you sell, you buy again, you sell again. So, if you make $5 profit on a $30 item and your sale cycle is a week but all of a sudden the item hasn’t sold and you’ve had it for 2 months, you’ve lost cycles of profit already. To cut your losses, you can sell it for $20 (yes, below cost price) because at least you get some money back and you can buy another product and keep your business growing. Tying capital down is never a good idea for any business. A version of this is when supermarkets and grocery stores sell products that are about to expire at massive discounts. So, no, they couldn’t have sold at that discount price but they’re cutting their loss. As a business person, use discount sales to cut your losses.

Business Discount Sales to incentivise customer behaviour

5 Little-known Secrets of Small Business Discount Sales

A business might prefer a particular payment or delivery method and to encourage its use, they incentivise customers by adding discounts if customers comply. It’s very clever because a lot of times, it’s a small price for the business to pay if the action they’re encouraging has a huge upside in the future. As an aspiring business, consider this only if the action you want to encourage will make a significant positive change to your business.

Business Discount Sales as a Marketing/Advertising tool

5 Little-known Secrets of Small Business Discount Sales

Advertising and marketing a business costs money. What if instead of paying for ads, a business decides to take from its own profits in the form of offering discount sales to customers. This is likely to make the business more popular hence be noticed by more prospective customers. As an aspiring small business owner, you should be careful with this because some discounts end up attracting customers who won’t buy at full price hence defeating the purpose of the exercise. You can choose to do bundle deals instead. Say, “buy 3 and get the 4th one free.”

Business Discount Sales to Drive Sales in a “dry season”

5 Little-known Secrets of Small Business Discount Sales

Doing business isn’t easy at all but as a small business with not much of a cushion, it’s even harder. Sometimes, it feels like no one is seeing your business, no sales, just a few enquiries that go nowhere. Giving out a discount can sometimes be the catalyst you need to get things back on track. Business discount sales can also come in handy around the end of the month when there’s some money chasing many businesses because it can make you stand out. Again, it’s important to properly analyze your business before embarking on this. The numbers have to make sense to your business.

Business Discount Sales to Reward Customers

5 Little-known Secrets of Small Business Discount Sales

Quite often customers think they only have a business relationship with their favourite businesses but they don’t know how much these businesses love them. They want to reward their most loyal customers and sometimes just want to give back generally as a show of gratitude. So, no, they’re not discounting because they could have done but chose not to, instead, it’s all love. As a business, make sure you reward customers to increase loyalty. You can reward customers by giving discounts to specific customers or even choose to pay their delivery fee once a month. A good example of this, is VISA‘s current campaign – VISA Dealathon. You can find out more about it here.

Business Discount Sales when used well is a clever tool that improves your business. Ensure that as a business you don’t fall into the danger of:

  • Fighting a price war since people now “expect cheaper prices” from you.
  • Attracting the freeloaders who never buy full price.
  • Being perceived as “cheap.” You don’t want to end up eroding your brand value.
  • Losing too much money.

Business Discount Sales aren’t employed because the business could have sold higher but chose not to. They’re also very useful to small businesses and should be used. If you’re a business on Twitter, a recommended platform for offering discounts is Night Market by Dammy.

Published by dikachim

Product Marketing Lead, Flutterwave