1. QUANTITY DISCOUNT DEFINITION

Quantity discount, also frequently known as discount pricing, could be defined as the business practice of lowering prices of goods or services. Nevertheless, it is important to keep in mind that if you lower your prices too much, this could eventually lead to losses. Therefore, every business owner needs to at least get a brief glimpse of the most basic discount pricing strategies, which also includes the potential benefits as well as the pros and cons.

2. QUANTITY DISCOUNT BENEFITS

• • Boosting conversion rates.
  • Creating incentives for repeat customers.
  • Strengthening the relationship between your business and your customers.

3. QUANTITY DISCOUNT BENEFITS

• Promoting brand recognition

If your business has been able to acquire a reputation for not only providing customers great products and/or service but also great prices, it is certain that you could also gain more customers via referral marketing, also known as the famous traditional word-of-mouth strategy. 

• Attracting new customers

If you have been able to calculate each of your customers’ lifetime value, now it is time to  find out if giving away a small percent of your profit (or even a large one) for a big discount could be of help in the long term.

• Allowing cross-selling and upselling

This could help make up for the money you have given up when providing the quantity discount to your customers.

QUANTITY DISCOUNT DRAWBACKS

• Potentially losing sales

Just a side note: If you hold sales too frequently, your customers might lose their sense of urgency in your business and only buy from your store only when you are holding sales, thus losing your ability to sell product and/or service at full prices.

• Changing reputation

If your business is well-known only for quantity discounts, then chances are you might have to face new problems in the near future once the discounts are over.