More about discounts

It´s easy to give discounts to get a sale but how wise is it?

If you have 30% margin on a product with a price of 800 before tax you will have 240 in margins. With 10 % discount you get in margin (800-80 (10 %) -(800-240)(the cost) = 160. The difference is 80 which means that with a 10 % general discount you have to have 50 % more sales in order to have the same revenue.

If you are sure that the discount will give 50 % more sales then it´s OK with discounts otherwise not ( if not the higher volume gives lower costs). There is a lot to think off when setting a price but that is also why selling is so fun.

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