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How to calculate deal economics for a promotional percentage discount
<p><font face="Poppins, sans-serif"><span style="font-size: 15px;">To calculate deal economics for a promotional percentage discount, a business owner</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">should consider the following key factors:</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Revenue Impact</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">1. Calculate the discounted price using the formula:</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Discounted Price = Original Price - (Original Price × Discount %)</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">2. Estimate potential increase in sales volume due to the promotion</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Profit Margin Analysis</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">1. Determine the cost of goods sold (COGS) for each item</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">2. Calculate the new profit margin:</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">New Profit Margin = (Discounted Price - COGS) / Discounted Price</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Break-Even Point</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Calculate the number of additional units needed to sell to maintain the same profit:</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Break-Even Units = (Original Profit) / (New Profit per Unit)</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Customer Acquisition Cost</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Factor in marketing expenses for promoting the deal</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Long-Term Value</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">Consider potential for repeat business and customer loyalty</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">By analyzing these aspects, business owners can make informed decisions about the viability</span></font></p><p><font face="Poppins, sans-serif"><span style="font-size: 15px;">and profitability of their promotional offers.</span></font></p>
Posted on 2/11/25, 12:00:00 AM.000
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Open4Biz Deals
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