Discount Pricing Strategy – why should you implement Discount Pricing in your shop?

Are you struggling to increase sales and maximize revenue? Discount pricing can be a powerful tool when used strategically, allowing retailers to attract new customers, boost customer loyalty, reduce inventory levels, or promote seasonal events. In this blog post, we’ll explore how to create an effective discount pricing strategy for your business that will help you capture more market share and accelerate growth. We’ll discuss the types of discounts available as well as how to properly execute them in order to drive conversions. Don’t miss out on learning the key principles for successful discounting that could make or break the success of your ecommerce store!

What is Discount Pricing and how does it work?

To make a long story short – discount pricing is an effective promotional tool for online businesses. By discounting the original price of goods and services, discount pricing strategies can help to boost sales by increasing demand and motivating customers to act quickly before the offer expires. This discount strategy has proven effective in helping businesses move inventory and create more loyal customers. This makes discount pricing a great way for online businesses to capitalize on potential profits and drive better results for their bottom line.

What are the benefits of using a Discount Pricing Strategy?

Attracting new clients

Customers are seeking the lowest prices. Therefore, they simply love discounts. It’s a great opportunity to buy some desirable items cheaper, save some money or – buy additional articles, often related to the purchased goods.

Discounts help you to create a short-term strategy for better market visibility and attracting new clients. It’s also an effective way to persuade buyers to make their final purchase decision and eliminate the risk of cart abandonment.

Liquidating excess products and old inventory

Old inventory and seasonal products can cause a lot of annoyance – as well as put you at risk of financial loss. After all, unless you don’t offer digital goods, you need a warehouse that also consumes a significant part of your budget.

That’s why discount pricing is a strategy worth considering. Sometimes it’s more profitable to decrease the price and sell the goods cheaper than to let them stuck in your storage waiting for better times.

Abroad expansion and customers loyalty enhancement

Discount pricing is one of the most effective marketing tools for expanding into a new market. When targeting a new customer base, discount pricing can entice prospective buyers and encourage them to try your products and services. Additionally, offering referral discounts to both the referee and the person being referred is another great way to build loyalty among customers. These types of discount tactics reward individuals who have already converted which helps increase their chances of referring more qualified leads. Finally, providing customer loyalty discounts is an effective way to promote loyalty and motivate customers to return in the future.

Speeding up the sales cycle

Offering discount pricing as part of a short-term discount strategy is an effective way to increase sales and get buyers to act fast! You don’t want to overdo it, though. Too frequent discount promotions could lead customers to think that a better discount is coming soon and delay their purchases. That’s why time-sensitive deals are great – they create a sense of urgency that convinces customers to take action now rather than later. Experian’s data backs this up, too – they found that promotional emails with a call-to-action driven by a sense of urgency had at least 14% higher click-to-open rates. So if you really want to drive sales, offer discount pricing with an expiration date!

Improving AOV

Discount pricing is a great way to get customers to buy your products and services, especially in the B2B space. By offering volume discounts for larger orders and bundling additional products or services with the main product, you make it more attractive for customers to invest in whatever you provide. You can also partner with global customers who want to purchase thousands of items and offer large discounts to win the business – this is useful for filling capacity and costs across all customers purchasing those products. Psychologists have even proven that 2-for-1 deals are better than a discount of 50%, so it’s always worth considering what works best for your company.

How to set your prices using a Discount Pricing Strategy?

Whenever we talk about promotions or regular offers in e-commerce, pricing is the dominant factor determining your financial profit or loss. It’s particularly crucial when it comes to discounts.

While launching and managing discounts all the decisions you make should be data-driven. Therefore, market & price monitoring is highly recommended.

If you are a small retailer offering just a few products you can easily track prices on your own, and adjust them e.g. in an Excel file. Although it may turn out a bit too time-consuming as well as error-prone.
However, if you are an experienced merchant with a wide range of offered articles or you’d like your business to expand, such an approach may cause more harm than good. Then what you need is an automated and reliable price monitoring tool that will give you access to updated market information. One of these tools is Dealavo.

Set your prices with Dealavo!

Dealavo is a price monitoring tool for shops and retailers that enables you to optimize pricing according to the prior pricing rules as well as the market conditions. Use Dealavo to implement effective Discount Pricing Strategies and leave the competition in the dust!

With Dealavo:

  • you’ll have an understanding of key players in the market and its overall volume and dynamics,
  • you can further increase your competitive edge with an instant response to price changes,
  • the data you acquire can be effectively analyzed so you don’t have to spend time or money – it’s already done for you! This
  • you will spot price wars before they become something bigger on the market.

    All in all, Dealavo is a great beneficial asset that can help keep track of and stay ahead of changing trends in the market, whenever you sell your products on regular pricing, or you’d like to launch a promotion.

To help you manage and optimize your pricing Dealvo provides you with a Dynamic Pricing feature.

Dynamic pricing can be an excellent asset for businesses. It is a pricing strategy that adjusts new prices for given products whenever necessary due to a variety of factors. In the e-commerce field, this method allows brands to keep up with the ever-changing market and adapt their prices accordingly. This approach can be used to take advantage of supply shortages from competitors, increase margins, penetrate the market by setting lower prices, or adjust prices based on temporal changes in demand. Utilizing dynamic pricing allows an organization to stay agile and maximize profits through careful monitoring and analysis of product/market conditions.

Dynamic Pricing adjusts your pricing according to the pricing rules you set up beforehand. There is no universal rule – everything depends on your business goals and needs. However, among the most popular ones you’ll find:

  • TOP 3 on the particular platform – use this rule to be included among the first 3 offers in a specific sales channel, e.g., Google Shopping.
  • Between two competitors – the rule allows for automated price setting between the selected competitors.
  • Below/above selected numerical attributes – this option offers the possibility to set the target profit margin as a specific amount or percentage (e.g. the specified product price should include a margin of at least 5%).
  • Below/above selected competitors – if we use this rule, the algorithm will generate lower or higher prices than the prices of our selected competitors.
  • Increase/decrease by a specific amount/percentage – this option allows you to decrease the price by a specific amount or percentage in a specific period of time. This means that, for example, the price of a product will be reduced by PLN 1 every three days.

Discount Pricing Strategy examples – which companies use Discount Pricing Strategy effectively?



Amazon is one of the leading e-commerce companies that use discount pricing to boost sales and hook customers on their products. How does it work? If you are an Amazon user, you’ll be offered a discount for subscribing to products within its Subscribe & Save program. Therefore, your purchase will be automatically repeated for a certain period of time yet you’ll get up to a 15% of discount for your customer loyalty.



The Chinese giant – Alibaba – encourages its clients to buy more by offering luring bulk promotions. The range of discounts fluctuates between 20% – 60%. The price also changes depending on the purchase volume.

Such promotions not only drive more traffic to the shop but also attract new e-commerce retailers to start their own dropshipping businesses.



Last, but not least – Ikea. Its discount pricing strategy is based on two main pillars: New lower price along with IKEA Family Member discounts. How does it look in practice?
A new lower price program may be considered a seasonal promotion whereas Ikea Family Member supports customer loyalty. This discount strategy also depends on the season, however, the discount percentage appears to be higher than during a regular promotion.

Tips for implementing a successful Discount Pricing Strategy in your business

Implementing a Discount Pricing Strategy on a whim won’t be the best idea. A successful campaign requires careful preparations. Here are some tips you can follow to make sure, your promotions will attract numerous customers as well as stand out from the competitive offers.

Analyze your competitors and monitor their prices

Staying up to date with what your competitors are doing is essential if you want your promotion to stand out and give you an edge in the market. For example, being aware that your rival might be launching their own promotional offer around the same time can help you decide whether to issue a counteroffer or take it into consideration when you’re formulating yours. To make sure you stay on top of any changes, there are two ways you can go about it. Firstly, analyzing data from past years will give you insight into when similar promotions have been launched so that you can plan accordingly. Secondly, using Dealavo’s platform will alert you as soon as one of your competitors lowers their prices – meaning you won’t miss a beat!

Examine your target group

If you are an entrepreneur running any sort of e-commerce business, it is paramount to understand your customer base. To do so requires having a reliable analytics structure in place; this way you can discover what goods or services they seek, and when they purchase them. Knowing this valuable information allows entrepreneurs better prepare promotional strategies that appeal to their customers. Plus, the more information you have regarding customer activity, the easier it is to anticipate trends, allowing you to stay ahead of the competition. It’s clear why deep insight into your customer base is advantageous: with great knowledge comes great opportunity!

Choose your products wisely

When it comes to determining which products should be discounted, there’s obviously a lot of thought that needs to go into it. It pays to ask yourself questions such as whether customers would have bought the item at full price anyway; what kind of margin you’d be able to make from the sale; and how this deal might affect your other products. Will people forego something more expensive for the bargain deal? Thinking through these questions will help make sure that discounting products doesn’t just pay off for customers, but for your business!

Keep an eye on your discount pricing strategy results

Measuring and monitoring your promotions is a vital part of seeing the results from them. It helps you understand the return on investment (ROI) from your promotions, which is really just an overall measure of how much value these actions had for your business. Tracking ROI involves evaluating the success rate of different kinds of promotions on various marketing channels and keeps you informed about what works for you and what doesn’t. With this knowledge, not only can you save money by identifying opportunities to optimize but also get more out of every promotion.

Discount Pricing Strategy – wrap up

In conclusion, discount pricing is a highly effective way to increase profits, generate more leads, and stay ahead of your competition. Dealavo is an ideal tool to help with pricing strategies and price optimization which makes it easier for businesses to benefit from this method of pricing. This can save you a significant amount of money in the long run while driving sales and creating customer loyalty. Since discounts heavily contribute to customer satisfaction, they can also lead to repeat customers who are much more valuable than a one-time sale. We urge retailers to take advantage of the great benefits of utilizing discount pricing in their business. To help you get started, we recommend giving Dealavo a try – the perfect tool to help with discount pricing – so go ahead and sign up now!