How to establish an eCommerce volume discount strategy

In the competitive eCommerce world, a solid and well-structured pricing strategy is pivotal to the success of any online business. An effective pricing strategy ensures competitiveness in the market, optimizes profit margins, improves customer satisfaction, and increases retention.

In this context, price intelligence tools are increasingly essential. They allow retailers to adapt quickly to market fluctuations and competitors’ strategies. A good example is Minderest’s Price Intelligence tool, which allows you to see from a global perspective how you can position your pricing strategy for each of your brands and categories.

Volume discount strategy: What is it, and what are the benefits?

Volume discounting is a pricing strategy that incentivizes customers to buy larger quantities by offering a lower unit price as the quantity they buy increases. This technique is widely used in eCommerce as it effectively increases sales volume, encourages bulk buying, and optimizes stock.

Benefits of volume discount strategies

Increase in sales volume: By offering a better price for a higher quantity, customers are encouraged to buy more.
Improved stock management: By encouraging the sale of large volumes, you can forecast demand and manage stock more effectively.
Customer loyalty: Customers who perceive that they get better value for their money are more likely to return.

Differentiate your business from competitors: Offering an attractive pricing structure can help you stand out in highly competitive markets.

Comparison with other discount strategies

Volume discounting is just one of many strategies used in eCommerce. It is, therefore, beneficial to examine the key differences between volume discounting and other popular strategies.

Bundle Pricing

The bundle pricing model involves selling multiple products as a single package at a price usually less than the total of buying each item separately. This strategy effectively increases the perception of value. It boosts the sale of less popular products by grouping them with items with higher demand. Unlike volume discounting, which reduces the unit price when buying more of the same product, bundle pricing offers a discount for purchasing different products together.

Tiered or ladder pricing model

Tiered prices offer different levels of a product, each with a different price. The main difference with volume discounting is that tiered prices do not necessarily incentivize buying in larger quantities, but offer customers customized options.

Wholesale pricing

Establishing wholesale prices means offering products in large quantities at a reduced price, usually to resellers or retailers. Although it resembles volume discounting in that it involves selling large quantities, wholesale prices tend to target a different audience and have lower profit margins.

Model to increase the average ticket price

Techniques to increase the average ticket in eCommerce are strategies designed to increase the average spend per customer. They encourage customers to add more products to their basket or choose more expensive versions of a product.

How to define your volume discount strategy

Defining an effective volume discount strategy requires careful planning and employing appropriate tools to implement and manage it.

Establish thresholds and price ranges

The first step in implementing a volume discount strategy in your eCommerce is to determine the quantity thresholds that will trigger discounts. These thresholds should be based on an in-depth analysis of your costs, market demand, and profitability targets.

The first step is to decide from what quantity of product you will offer a discount and set progressive increments. For example, you can offer a 5% discount for purchases of 10 to 20 units, a 10% discount for purchases of 21 to 50 units, and so on.

Price management technology and tools

Increasingly, price intelligence tools allow you to automate the monitoring of competitors’ prices and quickly adjust your strategies as needed without compromising your margins.

That’s why we recommend you use tools like Minderest’s Price Intelligence. Optimizing the effectiveness of your pricing strategies and remaining competitive in the market has never been easier.