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Use These Discount Pricing Strategies To Boost Your eCommerce Sales

Debarpita Sen

Specialist - Content Marketing @ Shiprocket

April 8, 2021

7 min read

When small businesses are looking to move their sales figures, one of the most common approaches is offering a discount. But,  how do you guarantee that your discount pricing will benefit your business rather than hurt it? For that, you need to set firm objectives and know the different approaches you can take to reach them. 

This article will tell you how to discount your prices, set the right goals, and the best ways to measure your success—leading to both responsible discounts and profitable sales.

Pros of Discount Pricing Strategies

Setting discounts on your pricing is a strategy that can drive more sales volume to your business, bring in new customers, and give you more advantages as well, such as:

Make Your Customers Feel Positive About Your Business

One advantage is that discounts make your customers feel good. When people receive a coupon or savings offer, they become happier and more relaxed. It could be beneficial in the long run if these positive feelings can be associated with your brand.

Help Customers Choose Your Products Over Competitors

Discounts also make it less likely for people to compare your products with other brands. This can help new customers choose your products over your competitors, giving you a foot in the door.

Before you pick a discount strategy, make sure you have a primary goal. Your goal will determine the type of discount you offer, how you’ll market it, and which customers you should aim to reach. Here are some of the goals you can strive for:

Acquire New Customers

You’re offering a discount because you want new customers to be interested in your products or services. With a discount, they can try what you provide with lower risk on their part. Plus, if the discount is a limited-time offer, new customers will have a reason to try your products and services now, rather than later.

Increase Your Sales

Your goal is to sell more units of your product or service, regardless of how many customers buy. This could mean going for volume sales, bundling products with each other, and having customers buy as many items as possible before they check out. 

Gain Repeat Customers

Unlike acquiring new customers, getting repeat buyers requires a different mindset. You’re using the discount to encourage brand loyalty rather than enticing people to try your products. This discount is usually delivered via a loyalty program for current customers—and it works. 

Get Rid of Old Inventory

Sometimes, you need to run a discount just to clear your old inventory. Perhaps you need to make room for new products, update a product line, or focus on better-performing products. 

Types of Discount Strategies for Small Businesses

Once you’ve picked a goal for your sale or discount, choose the type of pricing discount that works best with it. Below are some common approaches to discounting. 

Bundled Discount

For this discount, rather than lowering the selling price of one product or service, you reduce the cost of a group of items bought together. 

These bundles are different varieties of the same product type—such as shampoo and conditioner—but are cheaper bought together than when bought individually. Customers can then try different scents of the same product to find the one they like best, or they could change up the perfumes they use daily.

However, when planning bundled discounts, you need to study which products will be bundled together carefully. If the products don’t seem relevant to each other, customers might see the bundle as a betrayal.

To implement a bundled discount, look at the items that your customers tend to buy together. Consider also the problem that your most substantial selling bundled product is trying to solve. What other items in your inventory are solving similar problems?

Prepayment Discount

You can also offer a small discount for people who can pay for the products and services in advance, perhaps months or weeks before they are shipped or received. 

Prepayments can help build cash flow since customers are encouraged to pay earlier. This means that you can use their advanced payments to purchase additional inventory, buy supplies in bulk (probably at a discount), or make other investments. However, prepayments don’t work with all types of businesses. Only products or services that need recurring payments can benefit from this.

Physical products can also take advantage of prepayment discounts if they do recurring billing. Ipsy, a retailer that sells subscription boxes of beauty products, gives customers one of their monthly boxes for free if they pay a year in advance.

If your business model can work with prepayments, find out if you can offer discounts. Can your target customers afford to pay a more significant amount, most likely via credit card? Do they make advance payments for other similar products or services? 

Volume Discount

When you offer a volume discount, your customers end up paying less per item as long as they buy a more considerable amount of that item. Because you’re enticing customers to buy more units per order, volume discounts are a good option if you’re looking to clear inventory or increase the average value per order. 

Free Shipping

Another type of discount is offering free shipping. Offering free shipping can increase sales. Free shipping can also lessen your cart abandonment rates. Statista data shows high shipping costs are the top reason why shoppers abandon their online carts. 

But the danger with free shipping is that packaging and deliveries cost. Not charging for shipping can hurt your business if you’re working with low margins or if shipping costs aren’t factored into your product prices. 

To make sure that free shipping pays off, you can have free shipping available when an order reaches a certain amount.

How to Ensure Profitability When You Offer Discount Pricing

Now comes the hard part: making sure that the type of discount you pick lines up with your business goals. Make sure that you’re growing rather than losing income from discount pricing.


Compute if your discount will still allow you to profit from each sale and how much that profit will be. Here’s how you can keep your margins intact:

Keep Your Marketing Costs Low

While you need to promote your discount, make sure you don’t overspend. Doing so will cut in on your margins, and you won’t realize how much until the discount is over. Focus on marketing your discount to leads you are already in contact with, such as email subscribers, existing customers, and social media followers. 

Offer Upsells

Apart from the discounted items, make sure to sell relevant non-discounted items to these buyers as well. Even if you can’t increase your margins from discounted items, you can improve your profit per transaction.

Convert New Customers to Repeat Customers

When new customers buy from your business for the first time, do everything you can to convert them to become repeat customers. This will increase the lifetime value of each customer, thus increasing your sales.

Reduce Online Shopping Cart Abandonment

 It’s such a waste when shoppers don’t push through with the transaction at the last minute. Before you offer your discount, make sure that you’ve optimized your customers’ online shopping experience so that abandonment rates are low. One way to do this is to send a reminder email a few hours or a day after a customer abandons their cart.

Final Say

For discounting to pay off, you need to have a strategic approach. By knowing your goals and matching them with the right type of pricing discount, you can avoid the common challenges that come with discounting and instead bring in more sales and revenue.

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