Why Discounting is a Bad Idea
Sep 08, 2023
When times are tough and you need a boost in sales, a lot of small business owners turn to discounts and sales. Where you’ll offer a percentage off for a limited time.
It’s natural to do this, because clearly your audience are likely to respond to this and place orders right?
And they will.
But, providing percentage off discounts and flash sales can do your business more harm than good in the long time.
Why? Because people will come to expect you to run discounts, and will simply wait until you do to place an order.
Once you fall into the habit of running flash sales to boost revenue you will find it very difficult to get out of.
Not only will your revenue between your flash sales be much lower, but when you do make sales it will be at a much smaller margin because people are taking advantage of your discounts.
The last thing you want is an audience of customers who only wait around until you hold a sales event before placing orders. This is something we see all the time on this industry.
Not only that, but it devalues your work and your products. It almost turns them into a commodity product where you have to compete on price to get orders - which is very far from the truth.
People expect discounts, but they don’t expect things for free
One of the best promotions we run at Cosy Aromas are ‘buy X get Y free’. These work so well, whether that’s an ongoing promotion or for a limited time.
Quite often we will run events where people can get something for free with orders placed during a certain time frame.
It’s true; people do grow to expect discounts, because they’re everywhere. But they certainly don’t expect things for free all the time.
There are 2 reasons why I love these types of promotions:
- Customers will partake because they do not want to miss out on the free item.
- You will have more margin per order because the manufacturing cost of your free item will most likely be less than the percentage off discount you’d send out.
Plus, you’ll typically end up with a higher average order value too.
Percentage discounts do have a time and place
At Cosy Aromas we hold 2 big sales events each year where we offer a percentage discount. These are our big summer sales event and Black Friday.
Both of these events we build up massive hype for 3-4 weeks beforehand via social media, Facebook events and our Facebook group.
Because we only have 2 big percentage off sales events each year it means that people will take fuill advantage of them and we literally get thousands of orders during those events.
This is because these events aren’t diluted down by random flash sales throughout the year.
Alternatives to percentage off discounts
Here are a few examples of promotions you can run as an alternative to percentage discounts:
- Buy 3 for 2
- Buy 4 wax melts get a free sample
- Spend £20 get a free wax melt
- Buy 2 candles get a free wick trimmer
Anything along these lines perform well and will help to ensure you are getting good sales, but also will make sure that your percentage off discounts (once or twice a year) will have maximum impact.
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