Stop 10 · E-commerce & Performance MarketingTopics · 6/8

Pricing & Promotion Strategy

In short

A 10% discount sounds small. If your margin is 30%, you need a lot more sales just to earn the same profit. Smart promotions start with that maths.

Deciding how and when to discount — flash sales, bundle pricing, seasonal promotions — balancing short-term revenue lift against long-term brand and margin erosion from over-discounting.

The blob vendor holds up four red tomatoes beside a wooden cart full of vegetables at dusk.

Think of it like this

The sabzi vendor's evening deal

At 8 pm the sabzi vendor shouts '4 for ₹100!' on tomatoes that won't last till tomorrow. In the morning he sells at full price. He discounts on purpose, at the right time, for a reason. Good promotions are just as deliberate.

Watch it happen

Common pricing and promotion tactics

₹499 not ₹500

MRP ₹999, now ₹699

Buy 2, get 10% off

Free delivery above ₹599

Festive sale

1/5Charm pricing: ₹499 often feels noticeably cheaper than ₹500.

The big ideas

What you need to know

Know your margin

Every rupee of discount comes out of margin. Know it before planning any offer.

Discount with a purpose

Clear old stock, win first-time buyers, or raise order size. Not just 'sales are slow'.

Value over discount

Free gifts, bundles or faster delivery can feel generous without cutting the headline price.

Stay honest

Fake 'original' prices and false countdowns break trust and can break consumer protection rules.

See it in code

Walk through the code

excel

1B1  Gross margin                    40%2B2  Discount                        10%3B3  Extra units needed  =B2/(B1-B2)       → 33%4B4  At 20% discount     =0.2/(B1-0.2)     → 100%

1/3A 40% margin and a 10% price cut.

How much more you must sell to keep the same gross profit after a discount. Bigger discounts get expensive fast.

Save yourself the pain

Common mistakes

Oops

Running a sale every weekend.

Do this instead

Constant sales train customers never to pay full price. Keep promotions occasional and meaningful.

Oops

Setting the free-delivery threshold below your current average order.

Do this instead

Set it slightly above AOV so it actually nudges people to add more.

Your mission

Price a festive promotion

~20 min

Quick check

Your margin is 30% and you offer 15% off. Roughly how many more units must you sell to keep gross profit flat?

Go deeper

1Compare 2 different promotional strategies (flash sale vs bundle discount) for a hypothetical product.
2Learn why frequent, heavy discounting can train customers to wait for sales rather than buy at full price.
3Practice calculating the margin impact of a hypothetical discount.