Business Strategy

How can we give them 20% discount whereas I am only getting 10% off from the medical stores.

Pratik Singh Funder & CEO of 500mg

December 18th, 2019

I have startup of online medicine ordering and delivery platform.I have tied up with some medical stores within my city and we do the delivery on the same day to customers.

Tom K BPI

January 5th, 2020

If you're in business to only break-even (selling pills for what you pay for them) AND to give 20% discount, then you need to do the following:

Assuming a bottle of pills cost you $100 from your medical stores; AND you must show customers that you're giving 20% discount; AND to sell pills for no more than $90 (your 10% break-even point); then you must sell your pills for $112.50 retail, less $22.50 (the expected 20% discount rate), which would equal $90 (your break-even point).


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If however, since you're obviously in business to make money, AND must show you're giving clients a 20% discount, AND adequetly charging for your delivery services, then you need to do the following:


You must sell your pills for $150.00 retail, less $30.00 (the expected 20% discount rate), which would equal $120 (which gives you a $30 profit margin for your services ($120 less your $90 pill cost).


In other words, you can 'tell' your buyers that they are buying your pills for whatever amount 'they' want to hear. However, the 'total' cost remains the same at $150 (the difference being the cost for your services). It's jsut a numbers game.

Paul Garcia marketing exec & business advisor

December 19th, 2019

A business whose only competitive advantage is price is locked in a race to the bottom. There will always be someone willing to do the same deal as you for less money. And if your only way to compete is price, you've already failed (in the future).


My suggestion is to imagine how you would operate the business if you NEVER offered discounts. What unique value can you provide that will make customers choose you regardless of the lack of price incentives?


I ran a wholesale medical supply company for some years that also had a retail arm. The only time I offered discounts was on discontinued stock, and only to the point where it didn't lose money. I put more than 40 competitors out of business by focusing on my value (in this case quality), over a five year period, and maintained the second highest sales volume in my niche. People were always trying to undercut my price, but customers would always try and drop the competitor when they failed on quality or service.


Good luck.

RamOnRails.in CTO, SaaS expert, Product development, Listener, Learner, Architect

January 9th, 2020

Find a sponsor who would advertise with your product/service. You can even generate some profit, if you do the math correctly.