what methods do online retailers use to determine the discounts (percentage, duration) they offer?
In: 1
Human buying habits are studied by marketing experts who track the buying habits of their customers. If you’ve been to virtually any website recently, you’ve probably been asked about site cookies. Often these cookies feed information back to the websites owners about things that you clicked on and spent time looking at. They can then see if their sale is effective by tracking your interest as well as the number of products they sell. Sales generally become less effective over time, so when interest in the sale begins to wane, its time to end the sale.
Ultimately a company will generally not sell something without making a profit. if a company can offer 50% off, it means that >50% of the normal price is profit for the company. Even during a sale, the company is earning money. Often they earn more money during a sale because even though the have a smaller profit per item, they end up selling a lot more items.
Test different offers and see what’s the best happy medium of increasing sales while not leaving unnessary margin on the table.
A store could test 10%, 15%, 20% off offers and see how they perform in comparison and choose the one that generates the most total profit margin.
Latest Answers