Learn About a Little Secret to Business Success - Discount

Hello Great Entrepreneurs!
Welcome to my blog. Today, I choose to talk about discount because of its importance in business growth. We may have seen or heard of a particular business owner doing well more than the next business owner who is into the same type of business like the other. There is a secret to that. He is actually doing something that the other business owner is not doing. What could that be? Let's get to find out below.

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Discount

Well, this has been a long standing secret to business success which most successful businesses thrive on. It is something we perhaps have been doing but unaware of it.

Discount is actually a deduction in price of items purchased by a customer or an addition of goods to what has been purchased by a customer.

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For instance, if the price of a commodity is 5 steem and that is the conventional price that you can get it from every store, and a particular store decides to give it to you at 4.75 steem, that is a discount that has been given out.

On the other way round, assuming 5 pieces of a commodity is sold at 5 steem and the owner decides to give it to a customer at 6 pieces for the same 5 steem, that is also a discount that has been given.

Therefore, we have 2 basic types of discount and they are cash discount and trade discount

Cash discount is when the discount or the deduction is done on the price of any commodity like in the first instance I explained above.

Trade discount is where the discount is given on the goods and not cash like adding additional piece of goods to the original quantity at the same price.

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In either case, the business owner is the one at loss here because he has actually given out something he could have earned from. But why do you think such a business owner will want to take such a loss? Is it really a loss to him or to his business? Let's see the benefits below;

Benefits of Discounts Both to the Business Owner and to the Customer

To the business owner
More sales will be made: customers like deductions on the prices of the goods they buy or an addition to the normal quantity they want to buy. It is an enticement which can make them buy more than they even budgeted, thereby helping the business owner to sale more than expected.

More profits will be made: even though the business owner sales at a deduction from the normal sales and even though he adds additional goods to the normal quantity, he will make more turn over which will result into more profits. For example; assuming he has 10 pieces of products to sale at 5 steem each of which he bought at 3 steem each, which at the end of the sales, he will make 2 steem each and 20 steem in all 10 products and it can take him 10 days to sale all and make 2 steem as profit on each of the goods, the profit will be 20 steem at the end of 10 days. At the end of the sales, his profit will be 20 steem while he only sales 10 products.

Now, assuming he decides to offer a discount of 0.25 steem and it takes him 5 days to sale all and he happens to buy again and sale within the next 5 days again. That means that he will sale 20 of the products within that period. Then let's look at the profits;

The profits will be 1.75 steem instead of 2 steem by 20 = 35 steem which he got within the same period as against 20 steem which he got without discount. This shows that he will actually make more profits due to the turnover

• The business will also gain more popularity as anyone who buys will want to tell others about it.

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To the customer

• He/she must have gained additional goods or saved cash from the purchases as against what was budgeted.
• He/she can take advantage of bulk puchases.

In summary, discount on products is of great benefits to both the buyer and the seller and it gives room to business growth.

I was lucky to be among the winners (supported by @ngoenyi) in a Black Friday contest organised by @patjewell. You can read through my entry on Stores to Shop on Discount. Thank you!