Understanding Discounts: Purpose, Types, and How to Calculate Them

Understanding Discounts – One way to attract consumers to buy goods that are being sold is to provide various attractive promos. The interesting promo is the discount promo. In fact, this promo has often been used by many stores or companies. This is because with discount promos, it can increase sales or many people know the product being traded.

However, sometimes there are still some people who don’t know what a discount is. On this occasion, we will discuss the meaning of a discount and how to calculate a discount. So, see this article to the end, friend.

Definition of Discount

Discounts are a form of sales marketing strategy which then provides a discount on the value of goods without reducing the quality of an item being sold. Generally, the discount on the value of this item is in the form of a percentage discount or a nominal price discount.

However, giving discount promos should not be careless because it can be fatal or can even harm the store or company. Instead of profit even stump because the calculation is not appropriate. So, before making a discount promo, first know the purpose of giving the promotion.

Discount Promo Purpose

There are several promotional objectives that you need to pay attention to before making a discount promo. This needs to be considered so that the promo given will then be right on target and not waste the promotion budget. The following below are some of the discount promo destinations that need attention.

1. Discounts to Attract Visitors

If your shop has just opened and you want to get a lot of visitors, then you can create a discount promo for this purpose. With the discount promo given, it will be easier for shop owners to find out whether there are many shop visitors or not.

The purpose of this discount is usually implemented by giving discounts to new customers that are larger than existing customers. That way, people who have never been to the store can be interested in coming to it.

Apart from that, you can also make discount promos using the grand opening promo theme. You can give big discounts for a limited time. Here you don’t need to think about the profit first, the important thing is to cover the base price of the goods first. This is because the purpose of the discount promo is to attract as many visitors as possible.

2. Discounts for Out of Stock Products

Usually, at the end of the year, it is necessary to carry out a large-scale sale to use up old stock and then replace it with new stock. So that old product stocks can run out quickly, stores will carry out year-end discount promotions, warehouse clearance, and so on.

Because the goal is that the old product stock runs out, you can also be given a big discount. You can take a small profit margin, or maybe don’t need it if it feels like that. Later, you will place this big discount specifically for old product stock.

3. Discounts for Adding Customers

If you want to have more customers, not just customers who come once and never come back. Besides that, if your main goal is to build new customers, then you can make a discount promo for this.

An example of this discount promo is by applying a member card. If there are customers who have giving cards, they can get a discount. With a promo like this, you will have many consumers who are interested in joining the store member network so that they can then get benefits, one of which is a discount promo.

4. Discounts to Increase Profits

If the goal is to increase profits, then you can use a discount promo. Even though the system discount promo provides a discounted price, if you make the promo right, it can increase profits.

For example, discount promos that apply a minimum purchase. Buyers who have shopped for a minimum of Rp. 200,000, then these buyers can get a fraction of a percent discount. In essence, the buyer is then invited to buy more items in order to get a discount promo.

5. Discounts for Certain Moments

You can also give discounts at certain moments. For example, during Indonesian Independence Day, you can make an Independence discount promo. For example, by making a minimum purchase of IDR 170,845, the buyer gets a 17% discount.

Types of Promo Discounts

Below are some of the types of discounts that can be applied.

Nominal Price Discount

Nominal price discount Is a type or type of discount that is commonly encountered. This type of discount will provide an immediate discount. This type of discount can be said to provide convenience to prospective buyers. This is because the discount is done directly.

For example, for product A, a discount of IDR 50,000, of which the normal price is IDR 500,000, so the price is very clear, becoming IDR 450,000.

Price Percentage Discount

Discounts in the form of a percentage of the price can be said to be quite widely used. This percentage discount is available on the fixed system and some are up to. That means, if it is fixed , then the percentage is clearly a certain percentage, for example, 25%.

Meanwhile, on up to usually the system uses a maximum limit, such as a discount of up to 50%. However, sometimes there are those who only provide discounts, such as 20%, 30% or 5%. Essentially the upper limit is 50%.

For example, for purchases above 1 million rupiah, the buyer will get a top discount, such as getting a discount of 400 thousand rupiah. However, it should be noted that all discount promos depend on store policy and the buyer does not know about it. This percentage price discount can then be implemented with a conditional system.

Discounts in Kind

Apart from being in the form of direct price discounts, discount promotions can also be made in the form of goods. For example, the buy 1 get 1 promo, buy 3 get 1 free, or buy product A get product B free. In fact, this is also included in the discount promo. It’s just that the shape is then in the form of goods. The goods given are not free, but they have value and this value is then calculated with the price of the product sold.

Cash back discount

Cashback discounts can also be used, especially if the transaction is online or non-cash. For example, for payments made with ShopeePay, users can get up to 30% cashback. This cashback discount promo is perfect for online transaction models . If you sell on the marketplace , then you can activate a discount promo like this.

Shipping Cost Discount

Online transactions can also be done by giving a discount on shipping costs. Sometimes there are buyers who don’t buy a product just because there is no shipping fee. Therefore, in order to increase buyers, free shipping is made. That way, there will be many buyers who make transactions.

Wholesale Purchase Discounts

If you are a product distributor or agent, you can also apply a discount for a wholesale purchase. Even though this wholesale price is below the retail or market price, you can occasionally give wholesale purchases discounts. Maybe the discount can be given for old customers or for those who buy products in large quantities. In addition, the discount can be in the form of a discount or given in addition to the number of products.

Purchase Voucher Discounts

Discount promotions can also be from purchase vouchers. You can make purchase discount vouchers which are then given to potential customers. Later, it can be implemented in the form of a giveaway or door prize at an event.

How to Calculate Discount

How to calculate the discount? Even though it seems quite complicated, if you look at it from the seller’s side. Because to calculate how much the nominal discount will be given and what kind of discount model, you also need to look at many things. Below are some ways to calculate the discount:

How to Calculate Discount 1

First Discount Price (D1) = First Discount Percent (%D1) x Initial Price (A)

Final Price(X)= Second Discount Percent (%D2) x First Discount Price (D1)


A new smartphone released on an online shopping site sells for IDR 8,000,000. However, because it coincided with National Online Shopping Day (Harbolnas), the price was then discounted by 40% + 10%. What is the final fee that must be paid to buy one smartphone after getting a discount?


The first step to take is to find the price year of the first discount.

D1 = %D1 x A

D1 = (100% – 40%) x 8,000,000

D1 = 60% x 8,000,000

or D1 = 60/100 × 8,000,000

D1 = 4,800,000

So, the price that must be paid after the first discount is IDR 4,800,000, after that the final nominal value is determined using the second formula.

Final Price (X) = Second Discount Percent (%D2) x First Discount Price (D1)

X = (100% – 10%) x 4,800,000

X = 90% x 4,800,000

or, X = 90/100 x 4,800,000

X = 4,320,000

So, after getting a 40% + 10% discount, the final price of the smartphone is only IDR 4,320,000.

How to Calculate Discount 2

Final Price (X) = [100% – Percent Discount (%D)] X Initial Price (A)

An example of how to calculate a 20 percent discount:

A men’s long-sleeved shirt on an online shopping site sells for IDR 170,000. However, because it coincided with National Online Shopping Day (Harbolnas), the price of shirts was discounted by 20%. What is the final cost that must be paid to buy one shirt after getting a discount?


X = (100% – %D) x A

X = (100% – 20%) x 170,000

X = 80% x 170,000

or X = 80/100 x 170,000

X = 136,000

So, the final price that must be paid to buy one shirt after getting a 20% discount is IDR 136,000.


Thus the discussion about the meaning of discounts to how to calculate discounts. Hopefully all the discussion above is useful for you.