As an ecommerce business, one of the quickest and easiest ways to drive more revenue and make money online is by offering sales and discounts, but does it hurt your business?
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The short answer is yes. When you offer a lot of sales and discounts, some people get used to it, and they won't buy in the future unless there's a sale or discount. But that's okay, 'cause not everyone's like that. The long answer is, by offering sales and discounts, even though it could hurt you a bit and it usually does, your total revenue and your total profit is typically larger, assuming your sale and your discount isn't putting you in the negative, right? If your margin on your product is 10 bucks, but you're only $3 for the product, of course you're gonna lose money because your sale and discount is too heavy.
In general, when you're doing sales and discounts, you want to time to holidays and events. For example, it could the Father's Day or Mother's Day or Christmas or Thanksgiving or Halloween. You pick the occasion. It could be on your own yearly anniversary for your business. You pick when you wanna offer the sales and discounts and it will drive more online sales.
One company who does an amazing job of doing sales and discounts is Legion Athletics. Legion Athletics sells protein powder supplements for fitness people, right? If you wanna get buff, lose weight, whatever it may be. They typically do a sale or a promotion once a month. This drives a lot of additional revenue. They reached over $10 million sales because of sales and discounts. If it wasn't for that, their numbers would be drastically lower. When they have months that have sales and discounts, 'cause for a moment they're like, "Hm, we think is hurting us. Let's stop offering them," their revenue was substantially less, typically by over 20%.
So, if you wanna keep growing, offer sales and discounts but don't offer it on your main product items. So don't let someone just buy one product for 50% off. Instead, do what Legion does. They say, "Hey, we do sales and discounts when you buy bundles." So they may do a bundle package every month where they're combining their most popular items and saying, "Hey, if you buy these all together, we'll give a 20% or 30% discount." When you start doing that, that's when your sales drastically increase. Or they'll have an offer saying if you buy $100 worth of product or more, we'll give you $10 off plus free shipping.
So the key is to incentivize people with your sales and discounts. Don't just take your normal products and say, "Hey, if you buy them now during this sale period, you get 40% off." It has to be a special offer where you're bundling, packaging together, products, so then that way you won't tick off your existing, older customers and it encourages people to spend more money with you.
If you're ready to master your online marketing, then offering discounts can certainly help. Just be smart about your discount price and how you offer these sales.