The short answer: run discounts that serve a clear purpose — clearing stock, driving traffic, rewarding loyalty — and always check the maths first, because a discount cuts margin far faster than it cuts price. Used deliberately, discounts are a tool; used habitually, they train customers to never pay full price.
The maths you must do first
A discount comes straight off your gross profit, not just your price. If an item costs you 700 and sells for 1,000, your profit is 300. A “20% off” drops the price to 800 — but your profit falls from 300 to 100, a two-thirds cut in profit for a 20% price cut. Always check what a discount does to margin, not just price.
Discounts that work
- Clearance — recover cash from dead or seasonal stock.
- Traffic drivers — a deal that brings customers who also buy full-price items.
- Bundles — protect margin by discounting a group, not a single item.
- Loyalty rewards — targeted, so they build repeat business.
The traps to avoid
- Constant discounting — customers wait for the next sale and stop paying full price.
- Discounting best-sellers — you cut margin on items that would sell anyway.
- Across-the-board cuts — blunt and expensive; target instead.
- No goal — a discount without a clear purpose is just lost margin.
Measure the result
Judge a promotion by profit, not just the sales spike. Did the extra volume and traffic outweigh the margin given up? Sometimes yes, sometimes no — tracking it tells you which discounts to repeat and which to drop.
Discount with margin in view
RushFlow shows the margin impact of pricing and discounts, and the profit result of promotions — so you discount strategically, not blindly. See the live demo.