How to offer discounts without losing money
Apr 14, 2025
Understanding the Real Cost of Discounts
Discounts are a powerful tool to increase sales, attract new customers, and clear out slow-moving inventory. But if not handled carefully, they can erode your profits or even cause losses. Let’s break down a strategy that helps you offer discounts confidently while protecting your bottom line.
1. Know Your True Costs
Start with the basics: calculate the total cost of each item you sell. This includes:
Item cost: Your purchase price or total manufacturing cost.
Platform fees: eBay, Etsy, Poshmark, or other marketplace fees (usually a percentage of the sale).
Payment processing fees: PayPal, Stripe, or credit card processing (often 2-3%).
Shipping costs: Even if buyers pay for shipping, you may need to cover packaging, labels, or offer free/discounted shipping.
Other expenses: Returns, refunds, lost packages, or promotional costs.
Once you have a clear picture, you’ll know your minimum profitable price. Never set a discount that brings your price below this number.
2. Use a Central Inventory and Listing System
Manually tracking inventory and listing changes across multiple sites increases the risk of overselling, double-listing, or missing updates after a sale. A central inventory system keeps everything in sync, allowing you to:
Update prices and discounts everywhere at once
Automatically remove or adjust inventory after a sale
Save time and reduce costly errors
Tools like Gavelbase offer an easy way for resellers to manage listings, pricing, and inventory across platforms. There are also alternatives like Inventoro or SkuVault—choose one that fits your needs and budget.
3. Assign Simple Team Roles
Even solo resellers can benefit from thinking in terms of roles, especially if you ever bring on help. At a minimum, identify who (or what part of your day) is responsible for:
Setting and updating discounts
Monitoring inventory changes
Handling sales and order fulfillment
Customer communication (offers, questions, pickups)
If you have a helper or family member, clearly assign tasks. Document a simple process—e.g., "Update discount price in central system, then confirm inventory updates on all platforms." This lowers mistakes and makes scaling easier.
4. Track Sales and Fees Closely
Discounts mean lower revenue per sale, so it’s vital to track your actual profits after all fees and expenses. Use a spreadsheet or your inventory tool’s reporting features. For each sale, record:
Final sale price (after discount)
Marketplace and payment fees
Shipping and packaging costs
Net profit (what you actually keep)
This lets you quickly spot if a discount is cutting too deep, or if certain items can’t be discounted further. Over time, you’ll see which discounts boost profit and which just move money around.
5. Handle Shipping and Pickup Clearly
Shipping and local pickup are often overlooked when offering discounts. If you discount too heavily and also cover shipping, you may lose money. Easy steps to keep it clean:
Always specify who pays shipping before offering a discount
For local sales, clearly communicate pickup times and locations in your listing and messages
If offering free shipping as a discount, factor that cost into your minimum price
Consider using marketplace tools to print shipping labels and track packages. If you do a lot of local pickups, keep a simple log (Google Calendar, a notes app) so you don’t double-book or miss appointments.
6. Keep Discounts Simple and Manageable
Don’t overcomplicate your discount strategy—especially as a beginner. A few proven ideas:
Set a fixed percentage (e.g., 10% off) or dollar amount off for slow sellers
Run weekend or holiday flash sales on all platforms at once using your central tool
Offer bundled discounts (e.g., buy two, get one 25% off) only if your system can track it
Limit discounts to items you have lots of stock for, to avoid running out
Make sure every discount is easy to explain to your customers—and to yourself.
7. Review and Adjust Regularly
Schedule a simple weekly or monthly review:
Check which discounted items sold and at what profit
Adjust discounts up or down based on results
Update your inventory system and listings accordingly
This prevents you from "set and forget" discounting that eats into your profits over time. A little time spent reviewing pays off with smarter, more profitable sales in the long run.
Final Thoughts
Offering discounts as a reseller doesn’t have to put your business at risk. With clear cost tracking, a central inventory system, simple team roles, careful fee and shipping management, and an easy-to-follow process, you’ll be able to attract more buyers while keeping your profits healthy. Start small, review regularly, and use the right tools to keep everything running smoothly.