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How to use Shopify Volume Discounts to Generate More Revenue

  • 5 minutes

Shopify volume discounts, or the act of offering discounts based on bulk purchases, are a great way to unlock more revenue from each customer. However, discounting products in bulk also has some risks associated, and it’s important to understand the data before you start offering big savings for bulk purchases.

So how can you use volume discounts to make more sales and double your profits simultaneously? That’s what this article is all about! Let’s get into it.

What are Shopify volume discounts?

Shopify volume discounts refers to the use of discounted prices to encourage shoppers to buy a product in a large amount in one go. When a customer buys a product in large quantity at once, the merchant rewards the shopper by selling at a discounted price for each group of items bought. 

For example, a company that sells dresses wholesale might charge the full price for 50 outfits. However, the merchant can charge half the price if the customer buys more dresses after that. The discount increases the sale by incentivizing a larger purchase which wouldn’t have otherwise been made.

Who should use Shopify volume discounts?

If you’ve read to this point, you may be wondering who should use Shopify volume discounts. This strategy is suitable for e-commerce merchants across just about every industry. 

Whether you’re selling outfits across wholesale channels as mentioned above, or you’ve just opened your first ever e-commerce start up to sell your handmade soap, encouraging your customers to buy more is rarely a bad strategy.

Volume discounts allow businesses to buy more inventory at a reduced price. It also lets merchants or manufacturers decrease inventories by selling more products to bulk buyers who feel incentivized by the reduced price.

So it is simple, if you are a merchant or business owner using any of the major Shopify plans, you can create a volume pricing list for your products.

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Is discounting your products necessary?

To answer this question, let’s talk about the pros and cons of discounting your products.

First, the pros…

  • It drives sales fast
  • It can help you get people to buy a new product
  • It's a good way to get rid of extra or old stock
  • You can gain new customers
  • It can help you boost your reputation with specific groups

Now, the cons…

  • It conveys insecurity
  • It sends the wrong message
  • It lowers perceived worth of your goods and services
  • You can appear untrustworthy
  • It reduces profitability and exhausts sales teams

So, is it necessary? Well, it’s not essential. You may be in a situation where discounting products isn’t smart for either your brand or your sales goals. 

dipalready.com uses volume discounts on their product pages

On the other hand, there’s no doubt that discounts help boost revenue and encourages customers to make a purchase. You sell more and your customers feel like they got a great deal – everyone is happy!

Whatever your motives for offering a discount are, make sure it fits your buyer persona and aligns with your business goals.

Do percentage-based or value-based discounts work better?

Have you ever wondered if it’s better to give a percentage-based discount (e.g., 30% off) or a value-based discount (e.g., $50 off)? Which gets a better response?

Generally, the higher offer gets more response. For instance, if you compare a $50 discount to a 10% discount, the $50 discount would get a higher response.

It may not be about which option saves more money. Most buyers won’t even do the math. Their initial impression of a good offer is all that really matters.

shopify volume discount
samarabags.com shows customers exactly how much they're saving

Let’s say you sell something fairly inexpensive that retails for $25. Normally, a “40% off” discount would perform better than a “save $10” offer, even if the real value of the two offers is equivalent.

For a more pricey product that normally sells for $250, a “$50 off” offer would perform better than a 15% off discount– even if the latter is slightly more profitable. The $50 offer seems generous. And for most people, calculating 15% of $250 might be a lot of work.

If you’re concerned about what discount would get a better response, you can test to see what results you get before choosing the offer you will use.

Shopify volume discounts vs regular Shopify discounts

A Shopify volume discount is different from a regular discount, although both are somewhat similar. Regular discounts don’t involve purchases of a large number of goods. For instance, a “Buy one get one free” discount given to shoppers is a quantity discount at the retail level.

Advantages of using Shopify volume discounts

Sales growth: Volume discounts help merchants increase sales by encouraging shoppers to buy many products at once. Still, being strategic would help. Short-term promotions like this one are helpful when used temporarily.

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Increase in appeal: Offering low costs for large purchases attracts target consumers. It’s an excellent way to reach out to a new group of people. The secret is to concentrate on referral discounts. Why? People trust a discounted product recommended by a trusted colleague, friend, or relative.

Improve your competitive value: Offering volume or tiered discounts can put you ahead of the competition, making your business more valuable. What will make shoppers choose you over your competitors if you offer the same service or product? 

Discounts, of course! 

Who doesn’t like a good deal? Volume discount pricing gives your customers a reason to buy more because they see the value in what you have to offer.

Add Shopify volume discounts to your store with PickyStory

If you’re looking for a volume discount app on Shopify, PickyStory’s “Kit” deals allow you to offer volume discounts on a single product or a set of products. You can set up a product Kit and display it on your product pages, on a dedicated page, on your homepage, or almost any other page that makes sense in your store. 

Customers can choose which “tier” of the Kit suits them best, and you can set up as many tiers as you like for each Kit. This is an easy way of offering Shopify volume discounts while tailoring the deals to include or exclude specific products. 

As with all PickyStory bundles and deals, inventory is tracked for each individual product at SKU level. This means that your customers can’t purchase a product that’s out of stock, and also means your warehouse knows exactly which SKUs to include in the order. 

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Best practices for using Shopify volume discounts

Don’t over-discount your products: Offering discounts that are too high can harm your bottom line. Make sure you carefully consider the numbers when you are deciding how much of a discount to offer on your kits.

Check your inventory first! The whole point of using Shopify volume discounts is to encourage your customers to buy in bulk. They won’t be able to do this if you don’t have enough inventory on the shelves, so make sure you are adequately stocked before offering discounts for bulk purchases.

Factor in your shipping costs: Shipping costs can get expensive, especially if you are factoring these into the prices of your products and not charging an additional fee for shipping. If you offer a discount on a bulk purchase, and don’t charge extra for shipping, you can lose out in the long run.

Shopify volume discounts: Summing up

Shopify volume discounts are one of the most common ways to boost sales. If applied correctly, it can benefit both you and your customers. But sometimes, merchants just go for volume discounts without a plan. Instead, you should think about why you want to give a discount and how it will help you and your business.

If you’re looking for more Shopify tips and recommendations, check out the PickyStory blog.

Good Luck!

Read more: Upsell On Shopify: How To Upsell, Best Practices, Examples (+Pro Tips)

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  • Topics: Shopify How-To

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