Promotions that don't eat your margin

The simple math that hurts

Take a product for 100 with 30 of margin. A 20% discount takes 20 — you're left with 10, a third of the profit. To break even you must sell three times as many units. Will your promotion really triple sales of that product? Sometimes yes. But if you don't know, the discount is guessing with your own money.

The second, slower cost: customers learn the rhythm. A store that runs -20% every month sells at full price only to the forgetful.

Targeted discounts instead of carpet bombing

The biggest difference between a smart promotion and a wasteful one is the recipient. A -15% banner for everyone mostly rewards people who would have bought anyway. A targeted discount lands where it actually tips the decision:

• The hesitating customer — browsing, returning, holding a cart; for them a code can close the sale.
• Carts above a threshold — “free delivery over 200” raises order value instead of lowering it.
• Stock that needs clearing — discounts on end-of-line items free up the warehouse without hurting bestseller prices.
• Returning customers — a loyalty thank-you costs less than winning a new customer with ads.

Alternatives cheaper than -20%

Before you cut the price, try cheaper levers. Free delivery above a threshold usually costs less than a percentage discount and speaks to the imagination more. A low-cost freebie (a sample, a small accessory) raises perceived value without touching the price. A “better together” bundle grows the cart instead of shrinking it. And advice — a fast answer, product matching, doubts resolved — closes sales completely free: a good share of customers don't need a lower price, they need certainty they're buying right.

Season rules

Set them in September and write them down: which products may be discounted and which never; the maximum discount and the free-delivery threshold; who gets codes and for what. Pricing decisions are made worst in November fever — better that they're already made.