So you think that if you provide a discount on some of your items you might make more sales?
Well maybe you will, and maybe you won’t.
Here’s 5 things that you must check first BEFORE you start giving discount.
1. Test Your Pricing
The power is in your hands to decide how and when to offer discounts. If you devalue what you’re making, you also devalue yourself.
Pricing can be intertwined with an overall perception of value. It is crucial especially to people who are in the handmade business. Treat handcrafted items as different to mass market because it is really different.
You have to test your pricing. For example, one seller received a Convo from a customer saying that one of her $75 rings was overpriced. Instead of lowering the price, she doubled it. The ring sold the very same day.
It’s not always true that if something isn’t selling you have to lower the price just like David Picciutu said on his video about pricing. However, it can be applicable at times. You’re chopping yourself off at the knees if you lower the price too much, because people will think there must be something wrong with an item if it’s so cheap.
2. Reward Loyal Customers
In addition to attracting new buyers, offering discounts can be a great way to encourage repeat business. For instance, you might send a coupon to new buyers to thank them for their purchase and encourage them to come back to your shop.
To pinpoint which type of coupon might work best for your business, read Encourage Repeat Business With Improved Coupon Codes.
3. Run Added-Value Promotions
Promotions don’t have to cost money. You can find ways to generate buzz of a sale without lowering prices – and cutting into profits. For example, customers who bought a wine bottle bag from a shop received a free download of a wine tasting scorecard, an item that the seller usually sells for $5. Since she had already designed the scorecard, it did not required additional time or money to produce. Better yet, it offered an incentive to customers, who responded well to the sale.
4. Trial And Error
When hosting a sale, be mindful of timing and frequency. Offering sales too often can train customers to wait for a markdown before making a purchase. Customers may also start to think that your regular prices are too high. So when should you offer a sale? You might have to go through a trial-and-error process before finding the right strategy for your shop.
You might want to take the temperature of the overall retail climate by visiting your local mall and noting how many and how often retailers are holding big sales.
Listen to your gut instincts and look at your shop’s historical trends. For instance, if you have many customers that are willing to pay more for your products avoid holding sales.
5. Be Clear About Your Policies
Explaining your approach to bulk orders and discounts in your Shop Policies helps establish ground rules with customers.
Diane Sudhoff, owner of South House Boutique, an Etsy shop based in Maryville, Missouri that sells home décor and event accessories, clearly states in her policies and listings that her shop does not offer bulk discounts on Christmas stockings. “People are always asking me for discounts on my stockings,” Diane says. “I’ll politely say that everybody gets the same price whether they’re buying one or 12. The stockings still come off my sewing machine one at a time!”
Being able to point to her shop’s written policy on bulk discounts saves time and makes customers less likely to press the issue. Be sure to revisit and update your shop’s discount policies, particularly if you’re receiving repeat inquiries about certain rules.
That’s it. Mastering the art of giving discounts takes time, creative thinking, and a bit of experimentation.
So how do you offer discounts? How do you use coupon codes to encourage repeat business? Share your ideas in comments.