With unemployment at 10% and should increase further, experts are forecasting weak holiday sales this year and there is tremendous pressure on business owners to follow the example of the mega-marts and large companies that have started before the update asset holiday season has arrived yet.

If you follow their strategies for reducing prices? If you do, how to increase sales volume with which you need to return to same level of profitability?

Here is an example

We illustrate the effect of a reduction of 10% of the sales price of an item in a hypothetical transaction in a gross margin of 30%. In this scenario, a point of sale retail $ 100 would generate $ 30 million in gross margin (margin Gross is the money you earn in the wholesale cost of the section, with the exclusion of other costs that need to manage your business).

If you has a 10% reduction off, then the Sell Your Item 100 $ A $ 90 and may actually sell more of them. But since this article still costs $ 70 to its supplier, only 20 million gross margin sales. You may feel that your new selling price is still higher than the cost of the item, but sales are worth a further reduction 1 / 3 in turnover margin, which obviously means that you have to sell more than the price reduction to compensate for this difference is $ 10 and same amount in cash at the end of the month.

How much Do you sell product to offset the difference? In instead of, say, 100 units at a price regular $ 100 you would have to sell 150 units at a reduced price of $ 90 to reach the same number of dollars in cash, a 50% increase in sales of large volume!

In addition, we add the costs involved in having a sale, such as advertising and promotion fees, additional staff to handle the increased customer traffic, etc., etc., that erode their profit margin was further reduced.

So, I advise my clients not to fire unless it is a last resort.

What – if you are in this sauce? First, get help and make plans on how to get unstuck in Remember that someone who has the experience to help you through this difficult time and give the right answers instead of field sales.

Then Business Week published an article entitled "How to discount (if you insist) in its issue of August 14 with some good advice. Let me summarize:

• Briefly discount – the discount is like a drug and is addictive to businesses and customers
• Discount Credible – establish the reasoning behind the reduction credible and clear for customers. Make sure the sale is not seen as an act of desperation, and the
• Discount creative – focus on the promotion options Low prices, brands, or options that you keep your money in cash from the sale to avoid the "sale" tags on the items hanging on throughout the store.

Finally, do not let your good customer service. Make the journey to the place of a great experience for your customers and they will reopen their wallet in your office or store instead of competition.

Dan Elder is an experienced business coach and management consultant with Business Growth Accelerators. He specializes in growing retail and service industry businesses, and professional practices. He offers a free initial phone consultation to those interested in significantly improving their business situation. Learn more about how he can help you at bgaccelerators.com/servicesbusinesscoaching.html.

Dan is also a regular columnist for Business in Savannah (The Savannah Morning News), speaks on a wide variety of business topics, and is the author of the Business Growth Accelerators series on Amazon.com. He welcomes your comments. Contact him at bgaccelerators.com.

(c) 2009 – Daniel J. Elder. Permission is granted to reproduce and distribute this article in its entirety without fee or royalty. Portions may be excerpted for publication provided attribution is made, including the author’s contact information.

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