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<p style="text-align: justify;">The products sold in the e-Shop have a purchase cost from the producers (wholesale) of 80 € per piece (packaging) with VAT. In the store they sell them with a profit margin of 25%, ie the price of each item is € 100 including VAT. This means that they have a profit of € 20 per piece.</p>
<p style="text-align: justify;">The 2 girlfriends should determine the price of the products sold through the e-Shop. But the products are already in the Market from the Competitors. The 2 girlfriends have two options:</p>
<ul style="text-align: justify;">
<ul>
<ul>
<ul>
<li>choose the same price as the competition</li>
<li>to choose a lower price by discounting</li>
<li>to send along with each item and a gift to the buyer. </li>
</ul>
</ul>
</ul>
</ul>
<p style="text-align: justify;">As they want to start aggressively entering the online market, they decide that for the 2 months of the goal, they will sell the products through the e-Shop as follows:</p>
<ul style="text-align: justify;">
<ul>
<ul>
<ul>
<li>with a 10% discount so 90 € per piece</li>
<li>with gift electronic coupon worth 10% of the wholesale price of the product i.e worth 8 € for the next online purchase of the customer.</li>
</ul>
</ul>
</ul>
</ul>
<p style="text-align: justify;">Therefore for each sale they have a profit of € 10 compared to the wholesale price.</p>
<p style="text-align: justify;">If within 2 months the customer buys the same product again on the same terms, he will buy it again with a 10% discount and using the electronic coupon of 8 € will cost him 82 €. That will cost him every purchase from now on until the end of the 2 months of the offer.</p>
<p style="text-align: justify;">The company will earn € 2 per piece from the 2nd purchase and after the same product from the same customer.</p>
<p style="text-align: justify;">So what will happen?</p>
<p style="text-align: justify;">If, for example, the customer makes 3 purchases within 2 months with the above conditions, he will pay a total of 90 + 82 + 82 = 254 € instead of 3 * 100 = 300 € if the specific pricing policy did not exist.</p>
<p style="text-align: justify;">The company on the other hand has accumulated a profit of 10 + 2 + 2 = 14 € instead of 3 * 20 = 60 €, ie it has a reduction of profits by 76%.</p>
<p style="text-align: justify;"></p>
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<p><strong>CONCLUSION</strong>: The Company sacrificed 76% of the profits from 3 pieces of product but won 1 remote serial buyer (made 3 purchases). It is also important to emphasize that sales made with a physical presence in the business have not been affected at all by the pricing policy applied to online sales.</p>
<p>Also the 2 partners have decided that after the end of the 2 months they will sell the products through the e-Shop as follows:</p>
<ul>
<ul>
<li>with gift electronic coupon worth 10% of the wholesale price of the product i.e worth 8 € for the next online purchase of the customer.</li>
</ul>
</ul>
<p>Even in the coming discount period they will continue in this Pricing model, which is cheaper than the Competition.</p>
<p></p>
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