Doesn’t everyone love a good deal? When it comes to increasing sales in e-commerce, most online store owners think that a discount or special promotion is the way to go. After all, lower prices usually mean more buyers, right?
Well, sort of.
Too much of a ‘good’ thing is usually a bad thing. And not only will those spikes in sales be short-lived, discounting can also have some long-term negative effects on the success of your online business.
Though discounts have their place in online retail, things can get really sticky, really quickly if you don’t avoid some common pitfalls that come with the landscape. And frequency plays a huge role in that.
“Customers who are willing to pay more understand the value your products bring. Customers who wait for discounts didn’t want them to begin with.” -Geoff Williams
If you’re starting a business, your primary objective is to make money.
And your value shouldn’t be on a sliding scale.
After all, you came to win, not just offer a second place solution. And you believe that your idea can be the best thing out there.
Every business wants to be preferred but brand loyalty is hard to come by when someone is only looking for the best ‘deal’.
Trying to satisfy that person is a sure fire road to failure. You’ll discount and bundle your way right out of business.
We all love a good sale.
But it’s worth considering whether it can help or hurt your business, both in the short- and long-term.
When you price your product, you should always include a healthy margin. That’s one reason there is a major focus from an investor standpoint to keep costs down.
When you factor in materials, labor, packaging and shipping, you should include enough profit to take a reasonable hit based on factors outside of your control (economic downturns, acts of God and the like).