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Revised on February 19, 2026
Blanket discounts destroy margins
e-commerce strategy
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Blanket discounting looks like a shortcut to economies of scale, but it’s mostly smoke and mirrors.
When COGS stays fixed and margins shrink, volume has to compensate—often dramatically—just to recover the same gross profit dollars. And logistics costs climb right alongside.
The psychological damage runs deeper: customers anchor to the discount; suddenly, full price feels like a markup. LTV drops, churn rises. Revenue keeps growing, but customers get conditioned to expect the discount—meaning the business acquires less valuable customers over time.
The are better move to protect price integrity and inject value elsewhere: store credit, loyalty points, early access. Things that carry high perceived value but lower marginal cost.
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