The Hidden Danger of Discounting

As Black Friday looms and inboxes fill with discount codes, let’s take a moment to talk about something few businesses consider this time of year: the silent profit killer behind many promotions.

The Problem: Discounting Feels Easy—But It’s a Trap

In the race to win more customers and drive end-of-year revenue, many entrepreneurs reach for the most visible tool in the box: the discount.

It feels like a quick win:

• Slash the price.

• Make it look like a deal.

• Watch the sales roll in.

But here’s the problem—most of the time, this "quick win" destroys your margins, positions your brand as a commodity, and makes it harder to scale without stress.

The 10% Discount Trap

Let’s walk through the math most businesses overlook.

📉 You sell a product for $100
📉 Your profit margin is 30%
📉 That’s $30 profit per unit

Now…
If you offer a 10% discount, your new sale price is $90.
Your cost doesn’t change—it’s still $70.
So now you’re only making $20 per sale.

That’s a 33% drop in profit for the same work.

Here’s where it gets worse:

🎯 To generate $1,000 in profit:

• At full price ($30 profit), you need to sell ~33 units

• At 10% off ($20 profit), you now need 50 units
  That’s 50% more effort, fulfillment, customer service, and operations… just to earn the same result.

And what happens when you go to 20%, 30%, or 40% discounts? You’re not scaling—you’re sprinting in place.

Research Says: Discounts Don’t Always Work

Multiple studies have shown that discounts under 40% often don’t drive significant changes in buying behavior. So while you're sacrificing margin, you may not even be gaining meaningful volume in return.

You’re doing more… for less.
You’re working harder… with weaker results.
You’re “winning” the sale… while your business loses ground.

So What Do High-Performing Businesses Do Instead?

They don’t race to the bottom. They rise to the top—by adding value instead of subtracting price.

Here’s how:

✅ Bundle complementary services or products
✅ Create limited-time bonuses or upgrades
✅ Design exclusive packages or access tiers
✅ Infuse urgency without pressure (e.g., “only 10 spots left”)
✅ Tell a better story around your offer’s outcome and ROI

These strategies enhance perceived value—and preserve your pricing power.

NYCK Coaching Insight: Stop Discounting. Start Scaling.

At NYCK Coaching, we’ve helped dozens of small business owners escape the discount spiral by:

• Clarifying their Market Dominating Position

• Building offers that justify premium pricing

• Creating messaging that converts without pressure

Margins are the fuel for your growth engine. Every time you discount without a plan, you’re poking a hole in the tank.

Final Takeaway

Discounting isn’t inherently bad—but it should never be your default.
If your first response to slow sales is to lower your price, it’s time to rework your value stack, your messaging, and your systems.

Don’t sacrifice margin when what you really need is momentum.

📈 Ready to grow without discounts?
Schedule a free strategy call with NYCK Coaching:
👉 www.NYCKcoaching.com
Or explore our on-demand programs at:
👉 www.NYCKCoachingAcademy.com