freelance with a 2% pension fund. We have a product which costs 23 euros on the list (10% purchaseVAT/ 22% selling VAT) and a 36% discount. Since It’s going to expire soon, they offer a 5+3 discount. How much margin do I get for each sell?
Let’s start to insert data check what’s going to happen:
After inserting the price list and a 36% discount, we can see that the margin we get is not so high without any other discount: 3,76 euros margin and 20,35% margin.
Let’s insert another discount, 5+3, and examine whay’s going to happen: we get a 50,22% margin in other words 9,28 euros for each sell.
Since it ‘s going to expire soon, I can decide to sell the product at a reduced price of 18 euros: what’s going to happen?. Is it still convenient to me? More or less than the previous promotion sales?.
Despite of the considerable discount we applied, 5 euros each package, I can see that my profit is still higher than the normal market situation. I can get a 36,38% margin instead of a 20,35% as usual.
On balance I can push the costumer to go further with his purchase without decreasing my actual margin.
Thanks to M&R we can realise this situation and make the right choice.