You sell an item for $50.00 and the cost of goods is $20.00.
Now you are winding down your Christmas shopping season and you want to push more of this item, an item you've been selling at full price.
Say you want that item to sell for 30% off. That means the customer is buying the item for $35.00. Instead of making $30.00 of gross margin magic, you're making $15.00 of gross margin magic.
This means you have to sell twice as many items at $35.00 to make up for what you lose by not selling the item at $50.00.
If you have experiment-based data that tells you that units double when you are at 30% off, have at it!
Simple statistics and some math help you make reasonable decisions.
Post a Comment
Note: Only a member of this blog may post a comment.