Four Price Discounting Strategies To Increase eCommerce Sales - OpenXcell
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Four Price Discounting Strategies To Increase eCommerce Sales

4 Price Discounting Strategies for ecommerce

Price discounting is one of the oldest tricks in retail. Since time immemorial, shoppers have found it hard to resist a bargain, and that includes the opportunity to buy products for less than their advertised price.

It is a rare retailer – often in the upper echelons of the luxury market – who declines to take advantage of discounts. After all, getting a shopper to your store in the first place can be expensive. The ROI is often improved by selling a product for a little less if you can sell it right now.

Thinking About Price Discounts

There are really only a couple of considerations when setting up a price discount: how much of a discount and what will trigger it? The “how much” can be a percentage, an absolute value, or a free product. Triggers are diverse and might include the volume of products purchased, specific product categories, or customer behavior.

Price discounting is a powerful selling tool, but it can have negative consequences for a business if it isn’t handled properly.

Make sure the discount doesn’t leave the business in the red on a sale. For example, take care not to offer free shipping on a product that will cost more to ship than the discounted price – you’d be surprised how often that happens.

Excessive price discounting can damage a brand’s reputation. Apple rarely discounts its products: it wants to maintain a reputation as a retailer that sells premium products at premium prices. That brand image is worth more than a few extra discount-driven sales. Think about the impression you want you to make and who your ideal customers are before putting price discounts everywhere.

Types Of Discount

The most basic price discount is a simple reduction in price for a single item. But there are many discounting strategies that go beyond basic price cutting.


Bundling can be explained with a simple example. A shopper visits a fashion retailer and browses to the product page for a jacket. Also displayed on the page is a number of products that naturally fit with the purchase: perhaps a belt and a scarf. The shopper can choose to buy the jacket alone, or the suggested bundle at a lower price than the individual products combined.

Amazon is a master of product bundling. The “Frequently bought together” sections of its product pages are extremely lucrative. Similar functionality can be implemented on a WooCommerce store with the YITH WooCommerce Frequently Bought Together plugin and on Magento with Aheadworks’ Frequently Bought Together extension.

Volume Discounts

Volume discounts are probably the most familiar discount strategy: BOGOF (buy one, get one free) and similar promotions are volume discounts. The more the shopper buys, the less they pay for each item.

WooCommerce Dynamic Pricing offers flexible price discounting functionality that includes volume discounts.

Free Shipping

Providing free or discounted pricing for shipping is a huge win for eCommerce retailers. Shipping costs are a major cause of abandoned carts: the shopper feels like they are paying for nothing. But shipping is a huge cost for retailers; many can’t afford to offer free shipping for all products.

Free shipping for carts over a certain value ameliorates both effects: shipping costs are offset by the increased volume of products sold, and the shopper isn’t discouraged by a large shipping fee.

Incentive Discounts

Incentive discounts are an example of reciprocity: the shopper does something that benefits the retailer and gets a discount in return. That “something” might be Tweeting about their purchase, referring their friends, or joining a loyalty program.

In Conclusion

The goal of price discounting is to strike a balance by providing an incentive that increases sales without hurting profit margins.

There is an art to effectively discounting prices and the success of a discounting strategy depends on individual stores, their products, and their customers. My advice is always to measure the effects of any price discounting strategy carefully to ensure that it really does generate more profit than selling at the full price.




Graeme works as a technical writer for Nexcess, a leading provider of Magento and WordPress hosting. Follow Nexcess on Twitter at @nexcess and check out their tech/hosting blog,