Importance of Pricing A 5% Discount Can Reduce Net Profits by Over 30%! Original Selli 5% Price Discount Reduction Selling Price $135 128 5% Quantity Sold 100 100 Gross sales $13,500$12,825 -5% Discounts 7,000 7,00 Allow ances Net sales $6,500 $5,825 -10% Cost of goods sold 3,300 Gross Margin $3,200 $2,525 SG&A Costs Net Profit $2,100 $1,425 32% 8 O Copy rights reserved, Zou Deqiang8 8 © Copy rights reserved, Zou Deqiang Original Selling Price 5% Discount Reduction Selling Price $135 $128 -5% Quantity Sold 100 100 Gross Sales $13,500 $12,825 -5% Discounts & Allow ances 7,000 7,000 Net Sales $6,500 $5,825 -10% Cost of Goods Sold 3,300 3,300 Gross M argin $3,200 $2,525 -21% SG&A Costs 1,100 1,100 Net Profit $2,100 $1,425 -32% A 5% Discount Can Reduce Net Profits by Over 30%! Importance of Pricing