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A 10% discount sounds small, but it can take a third of your profit. Check what a promotion really costs before you put up the sign.
Sale price = price x (1 - discount). Margin after = (sale price - cost) / sale price. To keep the same total profit you must sell (old profit per unit / new profit per unit) times as many units.
Example: price 100, cost 60, discount 10%. The sale price is 90, margin falls from 40% to 33.3%, and you need to sell 1.33 times as many units (a third more) to earn the same profit.
Use it to plan:
Up Stock's inventory aging report lists stock that has been sitting longest, so your discounts go where they free the most cash.
Divide your profit per unit before the discount by your profit per unit after it. The lower your margin to begin with, the more extra sales a discount needs.
Yes, for clearing old or expiring stock. Turning dead stock into cash is often better than keeping it, even at a loss.
A discount is usually temporary or for a specific customer. A markdown permanently lowers the price, often for stock that will not sell at full price.
Percentages sound bigger on expensive items; fixed amounts sound bigger on cheap ones. The cost to you is the same, so pick what customers notice.
Cost, price, markup and margin from any two
Units and sales you need to cover your costs
The share of received stock that has sold