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  • Effects of Price Markup or Markdown in Ecommerce With Data Science

Effects of Price Markup or Markdown in Ecommerce With Data Science

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Most types of price markup or markdown which you have seen are temporary in nature. However, these can still have a long-lasting impact on a company's revenues.

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As you saw, there are generally three stages after a markdown or a promotional offer:

  • Revenue uplift due to price markdown or promotional effect

  • Troughs post revenue hike during a sale (this is due to the effect of pantry loading or stock loading)

  • Business as usual (BAU) situations (Note: BAU revenue goes through a step change after a successful round of heavy markdown.)

This brings us to the end of this session. You started with understanding a few business cases of price markup and markdown commonly used in the industry. Then, you saw the main reasons behind carrying out these markups and markdowns. Finally, you saw what impact these price alterations have on a company's revenue.