Promotions that add margin instead of giving it away

Start with the arithmetic

An item at SAR 100 net with a SAR 65 cost has a SAR 35 margin.

Discount it 20% to SAR 80, and the margin is SAR 15. You gave away57% of the profit for a 20% discount.

To make the same total profit, you now need to sell2.3 times as many units.

That is the number to have in mind before designing any promotion. Percentage discounts are the bluntest instrument available and almost always the most expensive.

Mechanics that work better

Bundles

Sell three items together at a price that is attractive but preserves absolute margin.

Three items at SAR 100 each with SAR 65 cost: SAR 105 margin at full price. Bundle at SAR 270 and the margin is SAR 75 — down, but on three units instead of one, and it moves slower stock alongside a fast mover.

The trick: bundle a high-margin item with a popular one. The popular item sells the bundle; the high-margin item pays for it.

Threshold offers

"Spend SAR 200, get SAR 25 off." The customer adds items to reach the threshold, and the discount applies to a larger basket.

At a SAR 200 basket the discount is 12.5%. At SAR 300 it is 8%. And it directly raises average basket value — seeretail KPIs.

Buy one, get one

Effectively 50% off, which is expensive — but ontwo units, and it works well for:

• Stock that needs to move before it expires
• Introducing a customer to a second product
• Items where your margin is high enough to absorb it

Check the margin on the specific item first. BOGO on a 30% margin item loses money.

Timed offers

A discount active only in your quiet hours — the happy-hour pattern. You are filling capacity you are paying for anyway, so a lower margin on an otherwise empty hour is pure gain.

This is one of the few promotions that genuinely creates value rather than moving it. Wameed supports scheduled timed events; see thepromotions feature.

Coupons

Targeted rather than broad. A coupon to customers who have not visited in 60 days is very different from a coupon to everyone, and far cheaper — the second gives a discount to people who were coming anyway.

Controls that prevent the promotion becoming a leak

• One coupon per transaction, unless you deliberately allow stacking
• Expiry dates on everything
• Per-customer limits on targeted offers
• A staff permission on manual discounts, with a ceiling by role
• Exclusions where margin cannot absorb it, set at product level
• A report of every promotion applied, by staff member

That last one matters. Promotions applied by one staff member far more than others is either exceptional selling or something else. Seepreventing till theft.

Measuring a promotion honestly

Three questions after it ends:

1. Did units sold rise enough to cover the margin given away? Compare to the same period before, and to the same period last year.
2. Did it bring new customers, or discount existing ones? If the buyers were all regulars, you gave money away.
3. Did it move the stock you wanted to move, or did it move whatever was already selling?

Most promotions fail the first test and the shop repeats them anyway, because revenue went up and revenue is what people look at.

Look at margin, not revenue. A promotion that raises revenue 15% and lowers gross profit 8% is a loss dressed up as a success.

The Saudi calendar

Season matters more than mechanic. Ramadan, Eid, back-to-school, national day, and the summer travel period all shift demand sharply, and a promotion aligned to real demand works better than a clever one that is not.

See theseasonal calendar.

The simplest useful pair

If you do only two things:

1. A threshold offer to raise average basket
2. A timed offer in your quietest hours to fill capacity

Both protect margin better than percentage discounts, both are easy to explain at the counter, and both can be measured in a month.