Abstract
“Low profit and high sales” is a strategy to increase sales volume by reducing the profit of unit goods, so that businesses can gain more profits. For flexible goods, price reduction can increase the total revenue, but when the goods are lack of flexibility, price reduction will reduce the total revenue. In this paper, according to the sales data provided by a supermarket, we preprocess the data, establish appropriate indicators to measure the daily discount strength of the mall, and establish a mathematical model between the discount strength, sales and profit margin. Through these models, we found that meager profits do bring up sales, but too low discounts can also hurt total profits. In addition, when shopping malls implement discount promotions, they will also bring some negative effects, and we give some suggestions for this.
Highlights
With the rapid development of the market economy, the retail market is maturing and the market competition is becoming fiercer
Due to the large amount of data involved in this paper, in order to more intuitively illustrate the issue of whether small profit has more sales, we have selected the top 10 and bottom 10 data of turnover, profit margin and discount rate
Comparing the data of the top 10 and the bottom 10, we can conclude that more sales can be more profitable. It can be seen from Figure 3: The profit margin is inversely related to the discount rate
Summary
With the rapid development of the market economy, the retail market is maturing and the market competition is becoming fiercer. In order to maintain or expand market share, companies often use some marketing strategies [1]. Many people have studied the policy of small profits but quick turnover. From the perspective of market laws, Yan Xiao and Decai Zhou discussed many factors that should be considered when implementing the strategy of low profits and quick turnover, see [2] [3]. Bisheng Tu used the price elasticity of demand to explain the two levels of constraints for the implementation of small profits but quick sales, see [4]. Chunmei Li used the sales price balance strategy with zero
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