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The Impact of Price Discounting on Gross Margin

And in the blink of an eye, we are more than halfway through February. In another two weeks, two-thirds of Q1 2024 will be in the books, meaning there will be a lot of Sales Leaders and Senior Executives starting to get nervous about Q1 Earnings Reports. Q1 earnings reports set the tone for the year and a poor Q1 could dig a hole that is impossible to get out of.

As we teach in our simulation -centric business acumen programs, conducting an environmental analysis and forecasting is the foundation of Business success. One of the “levers” that companies are pulling right now as part of their “what-if analysis” and planning for Q1 and beyond is price discounting .

The primary motivation for taking price discounts is to drive revenue to meet top-line (P&L) commitments. However, there are short- and long-term ramifications to the rest of the business and key metrics of performance from pulling that one lever.

For purposes of sharing, I have pulled some content from our core Business Acumen solution to share ideas and insights on why discounting can be good, bad, or non-consequential based on your current business condition.



This post first appeared on Advantexe Advisor, please read the originial post: here

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The Impact of Price Discounting on Gross Margin

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