--- title: The real cost of discounting description: As a merchant have you worked out the real cost of discounting and the impact it has on your business? image: https://content.bartercard.co.nz/hubfs/Stock%20Images/Discounting-1.jpg --- [![logo](https://content.bartercard.co.nz/hs-fs/hubfs/logo.jpg?width=209&name=logo.jpg)](http://www.bartercard.co.nz/) ![QOIN\_FINAL RGB\_web-01](https://content.bartercard.co.nz/hs-fs/hubfs/00%20AU%20QOIN/QOIN_FINAL%20RGB_web-01.png?width=151&name=QOIN_FINAL%20RGB_web-01.png)   # The real cost of discounting Posted by [Bartercard](https://content.bartercard.co.nz/blog/author/bartercard) on Oct 11, 2016, 9:00:00 AM - [Tweet](https://twitter.com/share) ![Discounting-1.jpg](https://content.bartercard.co.nz/hs-fs/hubfs/Stock%20Images/Discounting-1.jpg?width=652&height=242&name=Discounting-1.jpg) With so much competition and consumers looking at all options to bag a bargain, it’s no wonder people turn to the likes of GrabOne, TreatMe and Groupon for offers.  Why wouldn’t you?  But as a merchant have you worked out the real cost of discounting and the impact it has on your business? Daily deal websites charge a fee of approximately 15-20% of the sale price and stipulate that the offer presented must be at least 50% off the original sale price.  It’s easy to think by offering a discount you’ll bring in the customers and they’ll leave happy because they haven’t paid full price, but discounts cost money.   ###### For example ![Real\_Cost\_of\_Discounting.jpg](https://content.bartercard.co.nz/hs-fs/hubfs/Real_Cost_of_Discounting.jpg?width=589&name=Real_Cost_of_Discounting.jpg)   So by reducing your price by just 10% on a margin of 40%, you have to increase sales by 33% - that’s a big ask in a competitive market, especially when you add a fee onto that. Discounting can also have an impact on your reputation as highlighted in a [recent article](http://www.stuff.co.nz/business/small-business/84507640/grabone-vouchers-fire-up-auckland-pizzeria-manager), when an Auckland pizzeria refused to accept a customer’s GrabOne voucher.  All these aspects impact your bottom line. Bartercard is not a discount service and while there are fees associated with being a member of the network, it’s a mere 7.5% in comparison.  Bartercard allows members to grow sales by 10% or more within the first 12 months of becoming a member and we can prove it (Dot Loves Data, 2011) – no discounts are required! So do your sums.  Does it add up to offer discounts both from a profit and customer perspective?  Ask yourself this – are your customers loyal or are they just hunting for the next deal?   As a merchant, are you wanting more customers or have excess capacity you want to utilise? [Contact Bartercard](http://www.bartercard.co.nz/Contact.html) now to discuss how we can help.    Topics: [small business new zealand](https://content.bartercard.co.nz/blog/topic/small-business-new-zealand), [growing your business](https://content.bartercard.co.nz/blog/topic/growing-your-business) ### Subscribe to our blog   ### Most Popular Posts [![Attract New Customers](https://hubspot-no-cache-ap1-prod.s3.amazonaws.com/cta/default/1651106/fc0fa571-940a-4352-b12f-65321da5e95a.png)](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/1651106/fc0fa571-940a-4352-b12f-65321da5e95a) [![New Call-to-action](https://hubspot-no-cache-ap1-prod.s3.amazonaws.com/cta/default/1651106/bd796649-8338-4f46-8b3e-806d0cebde8d.png)](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/1651106/bd796649-8338-4f46-8b3e-806d0cebde8d) ### Enquire now about joining Bartercard