As we wrote a while back, by discounting your product you are cannibalising your future sales, training customers to only buy on sale, and devaluing your brand. The Economist recently posted an article about the dangers of discounting your products.
The Economist article highlights that:
“discounting is designed to encourage more consumers to buy their products in the hope they will boost sales volumes by becoming loyal customers. But with household budgets now under pressure everywhere, shoppers are becoming more opportunistic, buying whatever is reduced the most, says Tim Eales at IRI. In such an environment, promotions can easily squander profits without producing any benefit for future sales.”
It’s important to remember that discounting negatively effects long term revenue.