How to calculate a discount?

To calculate a discount, multiply the original price by the discount percentage (as a decimal). For example, a 20% discount on a $50 item: $50 x 0.20 = $10 discount. The sale price is $50 - $10 = $40. For dollar-amount discounts, simply subtract the discount from the original price.

How much volume do I need to offset a discount?

The volume increase needed depends on your profit margin. The formula is: Volume Increase = (Original Margin / New Margin) - 1. For example, at a 40% margin, a 20% discount requires you to sell 100% more units (double your volume) to maintain the same total profit.

What is a good discount strategy for ecommerce?

The best ecommerce discount strategies protect margins while driving sales: bundle discounts to increase AOV, volume/tiered discounts to reward bigger orders, conditional discounts like free shipping thresholds, time-limited offers for urgency, and loyalty-only discounts to reward retention over acquisition.

Should I offer percentage or dollar discounts?

Use the Rule of 100: for items under $100, percentage discounts feel larger (20% off $50 sounds better than $10 off). For items over $100, dollar discounts feel larger ($25 off $200 sounds better than 12.5% off). From a margin perspective, both are equivalent at the same dollar amount.

How to discount without destroying margins?

Set minimum margin thresholds and never discount below them. Use bundles to maintain per-unit margins while offering perceived savings. Discount slow-moving inventory selectively rather than running blanket sales. Track actual margin impact in real-time, and calculate your break-even volume before running any promotion.

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