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Helps & Tips for Ind. Sales Reps

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Free Gifts vs. Discounts

There are 2 groups of Avon Reps when it comes to offering "order incentives". Those that offer discounts and those that offer free product.

I personally tend more towards the "free product" way of thinking and below is the reasoning behind why.
Okay, you have a small customer base and you think that you will offer
discounts and maybe that will bring you more customers.
It will, but you're shooting your profits in the foot.
Here's why it's smarter to offer free products-in almost every situation.

Discount Incentive -

(for this situation, we're asuming that all products are at the full earnings level)

10% of for all new customers
10 customers that spend $10 each = $100 order total
10% discount ($1 each customer) = $10

Total to collect = $90
You have just LOST $10 in profits
Award sales towards PC - $100

Free Gift Incentive-

10 customers that spend $10 each = $100 order total
Free gift valued at $1 each per customer (book value)
= $6 (your cost at 40% earnings is $0.60 x 10 customers)
Your Order Total = $106
Total to Collect from your customers = $100
You lose $6 in profits instead of $10 saving you $4
Award Sales towards PC - $106

When you offer FREE GIFTS instead of a DISCOUNT .... You are getting GREATER award sales (getting you closer to Presidents Club!)... and You collect MORE money, than you would with a discount... And instead of losing $10 in profits.. you lose 6 dollars in profits, saving 40% of what you would lose if you offered a discount