# Sale Price|Definition & Meaning

The sale price is the final price of a product after any and all deductions (discounts) from its original price. For example, if a restaurant offers a 10% discount to members, and a member orders \$12 dollars worth of food, the sale price, in this case, equals original cost – (discount rate x original cost) = 12 – 0.1 x 12 = 12 – 1.2 = \$10.8, saving \$1.2. ## Attracting Customers: Another Word for Sale Price Figure 1 – Sale price attracting customers By offering a short-term discount from a product’s original price, sale prices draw customers. Consumers may save a lot of money as a result of this reduction, which increases the product’s appeal and purchase’s appeal. Additionally creating a sense of urgency, a sale’s temporary nature motivates customers to buy now before it’s too late. Sale prices can also convey a sense of value to consumers, making them believe they are getting a good deal. Retailers can use sales as a marketing tool by advertising them and providing enticing discounts to entice clients into their establishments. Customers may be more inclined to buy when a lower price and the perceived value of a good deal are combined, which can boost sales for the retailer. Additionally, promotions can make customers feel eager and anticipatory. This is especially true for end-of-season or clearance sales when customers are aware that they can find items at significant discounts. These sales can draw sizable crowds, resulting in a festive atmosphere that further tempts customers to buy. ## Formula for Sale Price The following is the formula for determining a sale price: Sale Price = Normal Price – (Normal Price x Discount Percentage) Where the normal Price is the item’s initial cost before any discounts are applied, and the percentage of the discount is expressed as a decimal (for example, 10% off is 0.1). ## Motive Behind Offering a Certain Sale Price Figure 2 – Agenda of Sale Price Although there are many different motivations for offering a sale price, retailers frequently do so for the following reasons: • Increased Visitor Count: Retailers may offer a sale price to draw more people into the store and boost sales. Customers may be encouraged to buy items during a sale who otherwise might not, which could increase the retailer’s profits. • Clear Inventory: Retailers may use sales to get rid of outdated or slowmoving inventory. Retailers can entice customers to buy these items by temporarily lowering the price and freeing up space for new products. • Compete with Other Retailers: Sales are another tool that retailers can use to compete with other retailers and draw customers. Retailers can attract customers away from rival stores by offering a more enticing deal by charging less than their rivals. • Attract New Customers: Sales can be used by retailers to draw in new clients to their establishment. Retailers can encourage customers to make their first purchase and possibly develop a longterm relationship with them by providing a brief discount. • Seasonal Promotions: Stores may run sales in conjunction with major occasions like Black Friday and Cyber Monday. They are able to draw clients who want to take advantage of sales and save money by doing this. These are some of the many motivations for setting a certain sale price for a specific product. ## Real Life Example Figure 3 – Real Life example of sale price Let’s say “XYZ,” a clothing retailer, wants to draw in more customers and boost sales during the holiday season. The retailer chooses to have 20% off a popular line of winter coats as part of a sale. The coats are currently listed for \$100 each before the sale. The retailer subtracts the discount of 20% from the normal price of $100 to determine the sale price as follows: Typical Cost = \$100

The percentage off is 20%.

Discount = 100 x 20% = 20.

### Solution

Sale price = Original Price – (Original price x Discount rate)

Sale price = 25 – (25 x 20%)

Sale price = 25 – 5

### Solution

Sale Price = Original Price – (Original price x  Discount rate)

Sale Price = 30 – (30 x 25%)

Sale Price = 30 – 7.50

Sale Price = \$22.50 In this case, the action figure’s initial cost is \$30, and the discount percentage is 25%. The shop can determine the sale price of \$22.50 by deducting the 7.50 discount from the original cost. During the holiday season, customers will pay \$22.50 rather than the action figure’s \\$30 original cost.

All mathematical drawings and images were created with GeoGebra.