Practical Ecommerce

Volume Discounts: Choose the Right Words to Boost Sales

Websites like Groupon, which allow people to “crowd purchase” products and services from local retailers, are becoming popular, mostly due to current economies. It makes sense for online stores selling items normally used in bulk to offer volume discounts, but what about specialty or high-dollar items? Groupon is proving that there’s power in numbers, and despite many brick-and-mortar stores reporting losses through the service, it all boils down to setting prices that work for everyone.

This past Christmas my husband and I purchased several of different products for various family members. We bought two Rokus, yet would have purchased more as gifts if we’d been offered a discount for multiple buys. While it’s difficult to compare an electronics site to that of Yankee Candle (which frequently offers discounts on quantity purchases), many people already crowd purchase from online stores simply to save on ship costs.

Online retailers wanting to increase average order amounts and move more product should consider offering a savings when someone purchases either more of a single SKU, or more products overall.

Choosing the Right Words

The way volume discounting is advertised does make a difference. Labels like, “Buy More & Save” or “Get 2 for just XX more…” are much more appealing than “Volume Discount” or “Bulk Purchasing.” Keep in mind the word “bulk” is rarely associated with only two or three items, so shoppers may think they need to buy a case in order to qualify.

In the following example, Party at Lewis changed from “volume discount” to “Mix & Match to Save Big.” The new label for its quantity discount became instantly clear.

Percentage? Or Dollars?

The way savings are presented also makes a difference. Two percent cash back on a credit card is appealing, yet saving 2 percent for buying another item doesn’t seem like much at all. There are three ways to post savings: the percentage discount (ideal if 8 percent or more), the savings amount (ideal if $10 or more) or the amount paid (such as, “get another for just $2.79”).

In the example below, RetroPlanet.com offers a discount if one purchases 12 or more of this diner coffee mug. This makes it more affordable for someone to purchase six for themselves, and six as a gift. It can also lead someone planning to purchase a set of eight to buy four more, since they’ll save.

Of course, discounting based on quantity takes some strategizing. After juggling the numbers, you also have to advertise it on store pages so it’s simple to understand, yet doesn’t impede on single-item shopping. The goal is to offer alternatives to those wanting to buy more (even when going-in on purchases with friends or family), giving them less reason to visit price-comparison sites.

Pamela Hazelton

Pamela Hazelton

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Comments ( 2 )

  1. mollygriffin January 27, 2011 Reply

    Great tips! Many of our clients here at Dydacomp are small businesses who are just moving into the eCommerce industry and are trying to compete with the larger businesses on these sites. Thanks for sharing!

  2. John Lindberg January 30, 2011 Reply

    Excellent article…some of those ideas had me slapping my forehead with the "why didn’t I think of that" reaction! The only thing that I can add is that one nice thing about volume discount offers is shipping cost per pound drops drastically as the total ship weight increases, but revenue often climbs in direct proportion to increased weight. In other words, it is much more expensive PER POUND to ship a 2 pound package than a 20 pound package to the same address. This simple fact provides an automatic funding source for volume discounts in many cases.

    John Lindberg-President
    EFULFILLMENT SERVICE INC