How companies are making money in Garments sales by offering Buy 2 get 1 free offer or 50-70% discounts on MRP?

Companies that offer "buy 2 get 1 free" or significant discounts on the manufacturer's suggested retail price (MRP) in the garment industry can still make money in several ways:

Photo Courtesy by Ivan Samkov, Pexels.com

Increased volume: Offering discounts can lead to an increase in volume of sales, as customers are more likely to buy more when prices are lower. This increase in volume can offset the lower profit margins on individual items.
Clearing old inventory: Companies may offer discounts as a way to clear old inventory and make room for new products. By selling old inventory at a discount, they are able to make some profit rather than having to dispose of it.
Brand exposure: Offering discounts can also help to increase brand awareness and attract new customers. The hope is that these new customers will continue to buy from the company even after the discount period has ended.
Upselling: Offering discounts can also encourage customers to buy additional items that they may not have otherwise considered. This upselling can lead to higher overall sales for the company.

In conclusion, companies can still make money from offering discounts and promotions, even if the profit margins on individual items are lower. By increasing volume, clearing old inventory, attracting new customers, and encouraging upselling, companies can generate additional revenue.

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