Stacked Discounts Are Not Additive
A common mistake is adding discount percentages together. Two successive discounts of 20% and 15% do not equal 35% off. The second discount applies to the already-reduced price: $100 × 0.80 × 0.85 = $68, which is a 32% total discount. The order of stacked discounts does not matter mathematically, but the gap between the sum and the actual discount grows with more and larger discounts.
When Discounts Hurt Businesses
Discounting trains customers to wait for sales and erodes brand value. A product with 40% margin needs to sell 50% more units at a 20% discount just to maintain the same total profit. For a 25% margin product, a 15% discount requires selling 150% more units. Before discounting, consider value-adds (free shipping, bonus items) that preserve perceived value while costing less than a direct price cut.