Gift With Quantity Purchase + Volume Discount
Learn how to Combine Gift with Quantity Purchase and Volume Discount to boost AOV this BFCM
Last updated
Learn how to Combine Gift with Quantity Purchase and Volume Discount to boost AOV this BFCM
Last updated
Offering customers great deals is a sure way to drive sales, but when you combine two strategies, you can create even more excitement around their purchases.
Combining Gift with Quantity Purchase and Volume Discount works by providing customers with both a cost-saving and a free reward when they meet specific conditions. Here’s how each promotion plays a role:
Gift with Quantity Purchase: Customers receive a free gift when they buy a specific number of items. This creates a sense of achievement and encourages shoppers to add more items to their cart to qualify for the gift.
Volume Discount: This discount is applied when customers buy a larger quantity of products. For example, offering a "Buy 10, Get 15% Off" promotion pushes customers to buy in bulk to get a better price.
Together, these promotions drive up order values by making customers feel like they’re getting both a great deal and a bonus, which is particularly effective for products that are bought in multiples or replenished regularly.
This combination works because it taps into both practical and psychological motivations.
Practical Appeal: The volume discount provides a clear financial incentive, encouraging shoppers to buy more upfront to save. This feels like a smart, economical decision.
Psychological Motivation: Offering a free gift enhances the experience by creating a sense of reward. Customers not only save but also feel like they are getting something extra, which adds value to the overall purchase.
When you're offering both a Gift with Quantity Purchase and a Volume Discount, it’s important to make sure that your promotions drive sales without cutting too deeply into your profit margins
To do this, you'll need to consider more than just the basic costs. Think about the discount you’re providing, the cost of the free gift, and how much extra sales the promotion will generate.
Here’s a formula to help you out:
Profit = (Revenue from discounted items − Volume Discount) − (COGS of purchased items + COGS of free gift) + Increased sales from promotion
Revenue from discounted items: Multiply the number of items sold by the price after applying the volume discount.
COGS of purchased items: Calculate the cost of the products your customers bought.
COGS of the free gift: Add in the cost of the gift you're giving away.
Increased sales from promotion: Estimate how much additional revenue you expect the promotion to generate.
By balancing these factors, your costs and the expected boost in sales. You can ensure that your promotional strategy works to grow your business without compromising profitability.
Let’s consider a store selling office supplies, specifically focusing on printer paper. The store wants to encourage bulk purchases and clear out extra stock of their premium printer paper.
Gift with Quantity Purchase: “Buy 5 packs of printer paper and get a free set of highlighters.”
Volume Discount: “Buy 3 or more packs of printer paper and get 15% off.”
A customer buys just one pack of printer paper at $15, without any promotions.
Revenue: 1 pack of printer paper = $15
COGS (Cost of Goods Sold): Each pack of printer paper costs $6 to produce: COGS = $6
Profit: Profit = Revenue - COGS $15 - $6 = $9
In this case, the store makes $9 profit on a $15 sale, but the customer only buys one item, leading to a lower total cart value and limited product movement.
Now, the store runs a Gift with Quantity Purchase and Volume Discount promotion. The customer is incentivized to buy 5 packs of printer paper to qualify for both the free gift (set of highlighters) and the 15% discount.
Revenue before discount: 5 packs of printer paper at $15 each = $75
15% Volume Discount: $75 × 0.15 = $11.25
Revenue after discount: $75 - $11.25 = $63.75
COGS of printer paper: 5 packs at $6 each = $30
COGS of the free gift (highlighter set): The free set of highlighters costs $4 to produce. COGS of gift = $4
Total COGS: $30 (printer paper) + $4 (highlighters) = $34
Profit: Profit = Revenue after Discount - Total COGS $63.75 - $34 = $29.75
In this scenario, the combined promotions drive higher sales volume and result in a higher overall profit, even though the AOV per item may decrease slightly due to the discount and free gift. Here’s how:
In Scenario 1 (without the promotion), the customer buys 1 item and spends $15, with a profit of $9.
In Scenario 2 (with the promotion), the customer buys 5 packs of printer paper and spends $63.75 (after discount), resulting in a profit of $29.75.
Increased AOV: In Scenario 2, the customer spends $63.75 instead of $15, which significantly boosts the average order value (AOV) and total revenue for the store.
More Inventory Moved: The store successfully moves 5 packs of printer paper instead of just 1, clearing out more inventory while maintaining profitability.
Customer Perception: The customer feels like they are getting a great deal because they received both a discount on the printer paper and a free gift (the highlighters), increasing their overall satisfaction and likelihood of making repeat purchases.
Scenario 1 (No Promotion): Profit = $9 AOV = $15
Scenario 2 (With Promotion): Profit = $29.75 AOV = $63.75
With the promotion, the store increases its profit from $9 to $29.75—a difference of $20.75. More importantly, the customer buys more products, leading to higher overall sales volume, increased inventory turnover, and better customer satisfaction.
Increased AOV: The customer is spending more to reach the threshold for both the discount and the free gift, driving up the average order value.
Moving More Inventory: The promotion encourages bulk purchases, helping the store sell more printer paper in a single transaction.
Improved Customer Satisfaction: The customer feels like they are getting a better deal by receiving both a discount and a free gift, which can lead to higher repeat purchase rates.
This combination works well for merchants looking to move larger quantities of products while offering customers an added incentive to buy more.
The best products for combining Gift with Quantity Purchase and Volume Discount are typically items that:
Are frequently purchased in bulk or larger quantities: Products that customers are likely to buy in multiples or stock up on.
Have relatively low to medium price points: This makes it easier for customers to hit quantity thresholds and feel like they are getting good value.
Complement each other or have high repeat purchase potential: Products that customers need regularly or items that can be bundled easily.
By offering both a gift and a discount for bulk purchases, you can move inventory faster and encourage repeat buying behavior
Here are some product categories that work exceptionally well for this combination:
By showing the numbers, it’s clear how Gift with Quantity Purchase and Volume Discount work together to encourage bulk buying. The customer gets more for their money, while the store benefits from increased sales and higher average order values.
