MBA1817 Do You Need To Offer Discounts? + Free Ride Friday

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night not working on my business but cleaning up numbers, tracking and reconciling payments and wondering how this became my life. But once I automated the admin side of things of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with intuit QuickBooks QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers and more. QuickBooks provides a team of AI agents and trusted experts, so doing it yourself no longer means doing it alone. Their payment agent gets you paid faster, their customer agent finds leads, follows up and secures more sales, and the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform. Ready to Save on new Tech? It's time for Dell Tech Day's annual sales event celebrating our customers with fantastic deals and benefits. Perks include Dell Rewards, free shipping, premium Support and more. PCs like the Dell 14 with Intel Core Ultra processors will help you do more faster and with a premium suite of monitors and accessories, you can upgrade your whole setup with amazing savings. Visit Dell.com deals.

Hey oh. Welcome to the $100 MBA show. The place to go for business goodness.

On the daily every single day with.

Our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher.

Omar is at home.

I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode Free Ride Friday. On Free Ride Friday we give away a lifetime membership to one of our programs. We're giving away Easy Course, our 30 day course that retails for $500 over EasyCourse co. If you want to win free access to one of our programs, just leave us an Apple podcast rating and review and you enter our weekly random draw we call Free Ride Friday. Listen in on Friday to see if you want it's that easy. We're going to be announcing this week's winner later on in today's episode. In today's lesson you will learn do you need to offer discounts? When is it a good idea to offer some sort of discount percentage or dollar amount to your customers? When is it a bad idea? How do you make sure you optimize your discount so people actually take it and sign up for your product or service? Not all discounts are created equal. I'm here to Explain why. Whether you're promoting on a webinar, whether it's a sale, whether it's Black Friday, some sort of launch, we're going to get into all of it. So let's get into it. Let's get down to business.

The all new five Year Business Boost from Comcast Business. It's the certainty of a price lock for five years on qualifying Internet bundles plus the most reliable WI fi with their best equipment. And ask about a $500 prepaid card when you add two lines of mobile. The five year business boost only from Comcast Business powering possibilities ends 22226 new customers only one year contract required for guaranteed rate. Five year pricing applies to monthly service charge excluding taxes and fees. Best WI Fi based on Open Signal Awards USA Fixed Broadband Experience Report May 2025.

I want to start today's lesson by saying something that is important. This is your business. You can do whatever you want. You don't have to do anything. You don't have to give out discounts. You don't have to do a Black Friday sale. You don't have to run some sort of promotion every holiday throughout the year. The joy and the privilege of being a business owner is that you can do what you want. More importantly, you need to do what's best for your business so it can continue to grow, so it can continue to be around and serve you and your customers. So the first thing I want to say is if your product, your service, whatever you offer your customers has a cost to produce. This is a different category when it comes to this topic than a product that doesn't have a high cost to produce. What do I mean by this? Well, let's say, for example, you sell T shirts. To offer this T shirt to somebody, it's going to cost you money to produce this T shirt. It has a cost to buy the T shirt, to print the T shirt, to package it, to store it, to ship it. All that stuff is a cost, right? You can't get away from those costs. And it doesn't matter if you sell one T shirt or 300 T shirts. The per T shirt cost amount is pretty much the same. Yes, you might have some volume discounts, but there is a cost involved even in each item. Now compare this to say for example, an online course or group coaching. You create the online course once you put in the time, the investment, the money to produce this course. Then you sell this course at scale. To sell a course to one person or a hundred people, the intrinsic cost of that course has already been paid. So you have a lot more flexibility when it comes to discounts. So I want to start there because again, discounting any product doesn't really work. I can't tell you that. You know, go ahead and discount 50%, everything you got. I don't know what you got. I don't know how much it costs you to produce and how much it costs you could continue to produce. So let's start with the low cost per unit kind of products. Online courses, coaching, live courses, live workshops, things like that. Okay, you're going to pay something to do this, either to produce this course or to host your event in a venue. At some point you're going to hit, you know, your break even. Let's say you need 30 customers to recoup the cost of producing an online course. But past that, it's all gravy. It doesn't cost you any money to sell that product or to provide that product to the customer. In these cases, a discount is not going to hurt your bottom line, your profitability as much as a product that have a tangible cost. So I do think discounts are a good idea in these cases. You'll see a lot of online course creators giving discounts when they're doing partnerships with somebody. They'll give a discount to the other party so they can sell the course and they still come out on top because again, it's all profit for them. So really the answer to this question is look at your costs, because you need to make sure that if you discount that you're still gonna make a healthy profit on each unit, on each customer. But be careful of phantom costs. A lot of people think that, oh, I have a software company and I can sell at scale and my costs are minimal. But there are a lot of phantom costs. Hosting customer service, email services, the salaries of the engineers that will fix problems. These need to be factored in. So anytime you discount something, especially if it's a reoccurring discount, like you say, hey, you're going to get 10% for every month you're a member. Instead of your first month or your first year, this chips into or this chips away at your profits. Now let's go to the other side of the spectrum where you have a real tangible cost for every unit you sell. I mentioned the T shirt example. Discounts here should be very, very calculated. You want to make sure you're still profitable and your margins are not too thin. Now, I had a clothing line as a business I had over a decade ago. Did I never do discounts No, I did do discounts. Where is the exception? Well, here it is. I can't sell the same T shirt or the same item of clothing forever. It has a shelf life. It has a season. At some point, it's going to cost me more to keep it in my warehouse than to sell it at a discount. There were times where I actually sold product with zero profit. I actually put it down to a really, really low discount. Why? Because I wanted to get that product off my shelves. Because any more time on my shelves is going to cost me money. I can't sell this product anymore. A new season of product is going to replace it. Beyond this point is going to be cost on my part. So there are products like this, like clothing, like food, seasonal things. For example, a friend of mine, Justin Jackson, who also was an early guest teacher on the show, had a snowboard shop up in Canada. With snowboard shops, you can't just sell snowboards, the same ones season after season. The snowboard manufacturers are creating new snowboards, new versions of each snowboard every season, and people are going to want the latest technology. So it's in the interest of the snowboard shop owner to sell all their snowboards for that season before the end of the season. That's why they say one of the best times to buy skis or snowboard is at the end of the season. You can buy whatever they have left at some pretty low prices. So you're ready for next season. Now, how deep should these discounts be? Well, how large are your profit margins? If your Profit margin is 25%, you can't afford to really discount the product that much. This is why it's healthy to have fat margins. That's why it's actually better to have your base price, your retail price, to be quite high, higher than you feel comfortable. This gives you room for discounts and this is applicable for physical online businesses, software, online courses. A lot of people will put the price on their website quite high. If people buy it at that price, great, because it's worth it. But then when they go and do a webinar, when they do a partnership, when they do some sort of promotion, there is room for a discount and people feel like they're getting a deal.

Does it feel like it's getting really hard to figure out the best way to save for retirement? Fidelity can help you find clarity so you can save the best way for you. With a free personalized plan, goal tracking, and timely insights, you'll be set to take on retirement your way. Get started@fidelity.com future expenses charged by your investments and other costs and fees associated with trading or transacting in your account. Apply Fidelity Brokerage Services member NYSE SIPC.

To wrap up today's lesson, you gotta know your numbers. You gotta know your profit margins. You gotta know what it costs you to run your business and to sell each product. And from there, you can actually just on a spreadsheet, list your options for discounts. What do my profits look like at this discount? What do my profit look like at, you know, 10%, 15%, 20% discounts? If you don't like the numbers, change the numbers. Change the base price of your product so that you have room for discounts if you want to offer discounts. And remember, if you don't, that's okay. Many companies, instead of discounts, offer perks, offer bonuses, offer exclusive access or exclusive coaching or training. They don't lower the price, they give them more value. Thanks so much for listening to the $100 MBA show, but today's episode's not over. It's Free Ride Friday. Let's see who won this week's Free Ride. And the winner is Ham Preeper. Ham Preper says Business Learning on steroids. 5 stars. Great content and guests. I wish the episodes were longer, but there's so many it's easy to listen to multiple ones. Very legit, humble and honest. Thanks for creating. I know that it's a commitment to produce. Thanks Hamperieper, for that awesome review. We'll keep on producing if you keep listening. Your mission is to email me over@omar00mba.net so I can hook you up with with the lifetime Access to Easy course over at EasyCourse co. Retails for $500. Today's winner just won it for free. If you want to win a free ride, just leave us an Apple Podcast rating and review and you enter our weekly random draw. Listen in on Friday to see if you won. It's that easy. Thank you in advance for doing that. Before I go, I want to leave you with this. More businesses go out of business because their prices are too low low than businesses that have their prices too high. Most people price their products too low and when they want to make a promotion, they don't have much room for that. So challenge yourself to increase your prices even as just by 10% and see what happens. You'll be surprised how little of an effect it has on your conversions, meaning people still piece and you make more money. Continue to make that increase until it makes the most sense for your business. Thanks so much for listening, and I'll check you in Monday's episode. I'll see you then. Take care. Of.

Building a portfolio with Fidelity Basket Portfolios is kind of like making a sandwich. It's as simple as picking your stocks and ETFs, sort of like your meats and other topics, and managing it as one big juicy investment. Now that's pretty good. Learn more@fidelity.com baskets Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC Member NYSE SIPC Member.