A lower price can attract attention, but extra sales do not automatically mean extra profit. In this Cofi lesson, Rob Steadman uses a simple product example to show why a discount needs checking before you advertise it.
Watch the Cofi teaching video on YouTube
Speaker: Rob Steadman, Cofi Business Network.
Work out what remains after the cost
For illustration, suppose an item sells for £10 and costs £6 to supply. The amount left before overheads is £4. A 25% discount reduces the price to £7.50, leaving £1.50 on each item if the supply cost stays the same. Ten full-price sales leave £40; matching that would require 27 discounted sales, leaving £40.50. This simplified example excludes overheads and assumes every additional sale has the same cost. Your own figures may differ, but the principle is useful: compare contribution, not just turnover. Consider whether a bundle, clearer explanation or better service would add value without reducing the price. A discount can have a purpose, but it should be a decision you understand.
Three actions to try
- Write down the normal price and actual delivery cost.
- Calculate what remains after the proposed discount.
- Check whether the extra volume is realistic and worthwhile.
Questions and answers
Who presents this lesson?
Rob Steadman, who runs the free Cofi Business Network. The example is an educational illustration; use your own costs when deciding on an offer.
Where can I ask questions and find more free help?
Cofi Business Network is 100% free. You can meet other business owners, share experience and explore practical ideas. Join whether you are starting out or already running an established business.
Join the free Cofi Business Network
Join the Cofi WhatsApp group to connect with the network and receive updates. Read about Cofi Business Network and explore our free small business resources. For meeting information, email info@digitalsolutions.help.