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“We can offer discounts but we can’t give away the store.”
–Ann Kobayashi

Alright, so now you have the beginning gist of how discounts and coupons can help your business. It’s time to delve into the deeper types of discounts. Discounts cover a wide range of sale options, from offering cold hard digital cash to bulk orders to free shipping. Basically, if you don’t offer a physical paper or code it can be filed as a discount. With this wide range of options, it can be slightly confusing to what can benefit your online store specifically, so this chapter will go over the most common discounts you can offer in detail.

Cold Hard Digital Cash Discounts

This is the hardest discount to actually give out to customers because you worked so hard to start your online store, and you are diligently budgeting everything you spend and profit off of. So now this guide you hoped would help earn you more money wants you to give it away?! Stay with it here-you aren’t really going to lose a ton of money. The idea behind this discount is to attract new customers, who will bring more money to your online store. If you offer a $5 or more discount off of a purchase, customers will jump at the chance to get free money, getting more traffic to your online store.

Over a period of time, mark up your prices slightly so that your products are no less than 5 dollars or the amount of your discount. Then customers are buying products from your online store, and you are making money even with a discount. The best option is to mark up the lowest item in your online store, just enough to be over your discount again, since this will be the item most customers will try first. Be sure to stock up on items so you don’t run out of merchandise halfway through your sale. Even the most reluctant customer is going to have a hard time passing up “free” money. Offering in-store cash as a discount is a great way to get traffic to your online store while increasing your profit margin.

Percentage Off Discounts

The percentage off discount works on a similar principle as the cold hard digital cash discount. Providing a percentage off incites customers to spend a little more, and you can mark up the difference in a few different places depending on what kind of percentage discount you choose to supply. Some main percentage discounts that are easy to use is to place one item or a group of items on-sale, to put bulk shipping at a percentage off, or to have a clearance section with sale items. For one item or a group of items on sale, planning ahead can save your costs. Purchase the items, or material needed to make the items in bulk to save some. More merchandise will be moving because of the sale, so be prepared ahead of time. Adding a minimum amount that must be spent to receive the discount such as spend $25 get 15% off can help accrue more profit.

Bulk shipping can be used in two different ways: First as a straight bulk priced offer, simply marking down the price on larger orders from your online store. Turning around and purchasing your own materials at a bulk pricing range can cover costs from this sale. Mark up the bulk price to just over your own bulk price costs to earn a profit. The second way to use bulk discounts is to have them accumulate over time for the customer. This works by offering a higher percentage off your product the more the customer purchases in bulk, which encourages them to continue to patronize your online store instead of someone else’s. More about this method will be explained in chapter 5, where we will discuss customer discount clubs.

The last discount involves having clearance items. If you decide your online store will no longer be carrying an item or service, mark it down to be rid of it faster. This is a great discount for items that customers rarely buy, since the frenzy of a lower price and never having the chance to purchase it again make for a quick sale.

Free Shipping Discounts

Free shipping is something almost everyone expects and loves in an online store. It makes customers feel like they get to shop without leaving their homes, free of charge. No waiting in lines, or searching for the right aisle or paying postage. That last thing is passed on to you, which can easily destroy your profits and put you in the red if not used properly. Assuming responsibility for shipping costs sounds great, but is not necessary for every online store.

First of all, check out your competition. If other online stores are offering free shipping, then your online store should be too. On the other hand, if the competition is not offering free shipping, you have the opportunity to offer something unique to attract customers.

Second, research your consumer base and mailing costs. Where are most of your purchases going? If they are within a reasonable geographical area to you, costs will be low and you can offer free shipping options. However, if your customers are ordering from across the country, or internationally costs are going to be very high. Pairing up with a mailing company, such as Fedex or UPS might allow you to find a discount to assuage costs. Economy shipping via USPS might also be a viable option to covering this discount without heavy losses to your online store.

The third item to check off your list to decide on free shipping is to examine your product. If you are selling a lightweight object, such as jewelry or paper products it is going to be a lot easier and cheaper to mail than someone selling bowling balls or rock collections. Packaging and insurance on your item need to be considered and added to the overall cost when you tally up your shipping expenses. If all of these steps have you thinking you can afford to offer free shipping in your online store, go for it. Customers often bail when they see the final shipping cost at checkout, so having free shipping allows you to keep those finicky shoppers.

If you got to the end of this list and thought “Well, this discount isn’t for me, my product is too heavy or expensive to ship for free” keep reading! Other options are available still. If having continuous free shipping is too expensive to your online store, you can always offer promotional or seasonal discounts that include free shipping. Plan your sale for the busiest time of your sale season, or for a lighter weighing product that is new to your online store. There is no reason you have to offer free shipping on all items you are selling online, so if you have to exclude the heaviest item or choose to offer free shipping on select items that is fine too. It still gets you the sale, just rephrase “free shipping, excluding…” to “The store is so excited to share this item with you we will cover shipping costs”. Customers will feel like your product is quality and be willing to purchase it instead of reading the fine print to find exclusions and restrictions.

Touching on exclusions and restrictions, these are definitely needed to keep your shipping costs from getting out of hand. Most online stores won’t ship to international destinations, which is crazy expensive and a hassle. You can place weight restrictions, or a minimum threshold of spending before including free shipping to cover more costs. Having a threshold encourages customers to spend more, such as “Free Shipping on Orders over $50”. Include these ideas in your discount to let customers know your limits. Also indicate whether or not your shipments are insured, can be tracked and how fast they will arrive to your customer.

Discounts are a wide-ranging sale option, and using numerous types can increase your profits and keep your online store fresh to new and old customers. Offering digital cash for them to play with, percentage off deals and free shipping can all be used effectively to increase traffic and profit to your online store. In the next chapter we’ll cover how coupons can do the same thing, but using a different method.

About the author

Haley Tasiemski

Haley Tasiemski

Haley Tasiemski is a content writer for Selz. Haley has been researching and writing for online business blogs for 2 years, and she has 2 bachelor’s degrees in both English and Bio-Field Communications. She lives in the Upper Peninsula of Michigan, traveling around writing when she isn’t gardening or attempting to train her fuzzy lab puppy, Lula.

2 comments

  1. Nance D.

    This has been helpful! Looking forward to more tips.

    1. Selz

      Kristen DeCosta

      Thank you, Nance! Much more to come!

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