I wanted to talk about the opposite of Nike’s favorite logo, the favorite saying which was "just do it".
In this context I’m talking about discounting, just don't.
So, I want to take you through a quick example of why discounting makes me shiver and shake, twitch and do weird stuff.
Let's say we buy something for $80. And we are going to sell it for $100. In which case we get to keep 100 minus 80 to pay our supplier gives us $20.
Now, here's the thing.
As our twenty dollars that we get to keep and Mr. Person, Ms. Person, Mrs. Person comes into our business and says, how about a discount? and we say hmm don't know and they eventually talked us into and we go. Sure! We'll give you 10%. Okay, so we're going to do this.
We're going to take price, now goes down to $90.
Okay, but you're what you get to keep goes down from $20 to $10. You've still got to pay the $80 up here for whatever it is you bought from your supplier, but now you've just given away 50% of your profit on a 10% discount.
So, it doesn't matter where you do this figure, discounting is always a bad option.
In fact in my quick cash calculator that sometimes I put up for people to buy. There's an algorithm in there. You can punch numbers in. You can see directly what the impact discounting is having on your business.
So, please when it comes to discounting JUST DON’T!
Have a great day!