Have you ever been in a similar situation like Jessica did? She promoted a purse of brand A at her store, she was so happy when she saw sales on this product rose 50% per day on average. However, when she looked at her total gross margin (sales excluded cost of goods sold) at her store, it did not change that much and even decreased a little bit.

She did not get more money in the promotions and even lost some money! I call this promotion trap.

How does this happen? I will talk about promotion trap in this blog and coming blogs.

If you are stuck in a promotion trap, first of all, of course, you should check your sales report. Check whether your gross margin earned on this product on a daily basis increase or not.

If it doesn't, it indicates that your promotion failed completely, you did not get enough purchases to compensate for your sacrifice (e.g. discounts or coupons...) in the promotions.   

Do not be afraid of failure, it is much better than you do not take any actions to grow your business.

Tip: read your sales report for the promoted product on a daily basis to adjust your promotion strategy. 

• On promotion day one, do your sales on this product grow?
• If not, decide whether you want to continue this promotion because many people might and might not come in the following days.
• If you do see sales on this product grow in the beginning days, how about your gross margin on this product?
• If you promote it for a few days(3, 5 days), you still can not see daily gross margin grow on this product, you should make some changes, either stop the promotion to prevent further loss, or change promotion strategy.

If your gross margin earned on this product does increase, it means your promotion at least help you make more money from this product. Jessica actually was in this situation when she promoted the purse. But how come her total gross margin did not increase? We will talk about it in my next blog.