You Do Not Need to Discount
Let’s talk about discounts. Do you regularly run sales or discounts? Stop It! If you are constantly having a sale, why would any of your customers want to purchase when you aren’t having a sale? Would you walk in to your place of employment and tell your boss, it’s the end of the month so I’d like you to pay me 40% less? They would look at you funny, and wonder what was going on.
You and your product are worth full price, and if you do not believe that you need to work on it. Mindset is everything! If you want to run a special or a sale, think of it as offering something extra for free vs. discounting.
I was watching an episode of #AskGaryVee, and the guest was Jon Taffer from Bar Rescue. He said something that was like a lightening bolt. People get addicted to discount, they don’t get addicted to free. Read that again…people learn to expect a discount, but do not do that with free.
Think about it. Do you have a store that you know everything will eventually be on sale? I will never pay full price for an item at Kohl’s because I know it will be on sale. They have trained me to believe that their items are not worth the original price, and I hate Kohl’s cash because I never remember to use it. Great plan for them, but it also did not get me back in the store. It’s like the infomercial technique that says, “But wait if you act now we will cut the price in half!”. Makes me think it must not be worth even the price they end at. Still a tactic, but saying, “But wait, if you act now we will send you two!”. It may not make me order, but I do think differently about the product.
A Look at the Numbers
Let’s do an example, and for easy math let’s just say wholesale is 50% or retail amount. You want to run an end of the year blow out at 40% off everything. Sounds like a great way to drive traffic, and move some product.
Example 1: Special is 40% off. Customer buys $100 retail, pays $60, costs $50. Retailer netted $10. Customer happy, retailer sad. Worse yet, customer wonders if you’re going out of business.
Example 2: Special is buy $100 worth of product get $40 item free. Customer buys $100 retail, costs $50, and gets $40 item free that costs $20. $100-$50 cost-$20 cost of free item=retailer netted $30. She’s happy, you’re happy. Customer doesn’t expect to get something free every time, and feels special.
Whether you’re selling LuLaRoe, selling on Etsy, or selling anything, never devalue yourself. Once you start discounting yourself, that is what people will think you’re worth. Believe in your product, and above all else believe in YOURSELF. You’ve got something awesome to offer, don’t forget that!
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Until next time….