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We all love discounts! Admit it.
Who wouldn’t want to avail something of the same quality for a lesser price? It is common for us to grab the opportunity to buy discounted items and items on sale especially if we really do love the item that much, but we are so broke. We don’t want to be in the waiting line in availing those discounted items; instead, we want to be among the ones who are the first to grab those. On the seller’s perspective, discounts and sales are forms of marketing style that can help the company raise its revenue and target quota.
Speaking of discount and sale, let us have a glimpse and a little overview of these terms.
Most of us already know what a discount is. It is the deduction from the gross amount of something; that is, an item is being sold for a price lower than the original amount. Discounts usually come in percentages like 10% discount, 20% or 25%.
So, what is the difference between discount allowed and discount received? How about a discount and a sale?
Actually, the difference is just the perspective of having the discount. In the seller’s perspective, they are offering discounts, hence, discount allowed. It is the amount or percentage allowed as a discount to the gross price. On the other hand, discount received is what is seen in the customer’s perspective. The discount received is the amount that is taken at the original price. To sum up, discount allowed is granted by the seller while discount received is the one received by the buyer.
Discount and sale are similar in a way that both of them reduces the original amount of an item being sold. However, the two are also different in some ways:
You may be hearing the word “coupon” in stores and market and shops. People usually get excited upon hearing this term, just like the terms “sale,” “discount,” “freebies,” etc. What really is a coupon and how does it work? How can one make use of it?
A coupon is a piece of paper or something that holds a discount for certain items in a certain store or a freebie or a free product or services. Companies would offer these coupons with or without certain conditions. Examples of conditions include purchasing items up to a certain amount, availing limited-edition products, and referral up to a certain number of persons. However, some companies will give out coupons for no condition at all. It is like giving a freebie to someone. Other companies would also distribute coupons during their company anniversary or other events.
Discounts can really attract new customers or prospective clients. Also, previous customers would like to return to your company knowing that you had discounted items again. Your discounted products can also increase traffic and in turn increase profitability. More and more customers will get allured by your discount if you will advertise it clearly and precisely. Make sure to entertain your customers well for a single customer had hundreds of friends that may be referred to your company.
As said earlier, when more customers will be attracted to your company, your sales will increase. How is this possible? As discounted items draw people towards your company, many people will come and expect that they will walk around, check out your other products, and purchase not only the items that are discounted but also those regular-priced items. For example, if you are selling certain books for a discounted price, customers tend to check out all the other books in your shelf, and, if they saw books that they love, they will certainly buy those books even if those were not part of the books with discount.
Some companies have overcrowded stockroom with huge piles of inventories. In order to dispose of this, these inventories must be pulled out from the stockroom, and throwing them completely is the worst idea. Old inventories which are not any more appealing to the public may be offered to the market with discount. With this, companies can free up space in their stockrooms and make way for new inventories. If you are a company who is in doubt and afraid that discounts may affect your sales, remember that the items you discounted had the least chance to be disposed of if they are not put into the sale. Moreover, people availing your discounts can at least have an idea about your company that will lead to customer loyalty.
Discounts may also help the reputation of the company increase. Giving discounts to the elderly or those that are in difficult situations can improve the reputation of the company since the trend in most businesses is all about making money and not wanting to spend it casually. To build your good reputation as a company, you must make an effort to do something good to the people and give them benefits that can help and satisfy them. Once you have a good reputation, many customers will trust in your company and will do business transactions with you.
If you are thinking that you might be selling a discounted item for a cost lower than your profitability margin, think again. How much did you spend on advertisement? Discounting your items can be a good way of advertising, too! You are informing people about the things that are on discount and the things that you are offering and what you can offer. Make use of your announcement for your discount to advertise your other products as well. Customers will be informed not only of your discounted items but also of those that are of the regular price. Think of a marketing strategy that can go along with your advertisement for the discount, and it will be like hitting two, or even more, birds with one stone.
Given the seasonal fluctuations in consumers’ buying behavior, sometimes, targets are just too far to reach and forecasts are so far from what is a reality. Many companies are having a difficult time reaching the target especially with unpredictable patterns and seasonal fluctuations. To be able to still meet the target sales for the given period, companies would resort to putting certain items on a discount to pull customers attention and attract buyers into buying their product. It is important that even if you are having a discount, you are still having an income from those items. Do not go beyond your margin of safety, and ensure even a small amount of profitability.
Customers are important for they are the ones that support the company, for if there will be no customer, there will be no profit for the company. Giving your customers products that are of great quality and providing services that are of great value can build and improve the loyalty of the customers. Building customer relationship is important for the long-term sustainability of the company. If a customer had tested and proven the quality of your product, this can lead to repeat business and a great advertisement to the market which would attract more customers and, in turn, generate more income.