All Collections
Metric Glossary
Price Reductions Value & Rate
Price Reductions Value & Rate

How the Discount Rate and Value is defined and calculated

Valentine Strunz-Happe avatar
Written by Valentine Strunz-Happe
Updated over a week ago

The total value of price reductions (not discounts or vouchers) of all product sold.


Formula

Price Reductions Value = SUMIF( Compare At Price IS BLANK, 0, Price - Compare At Price)

Price Reductions Rate = Price Reductions Value / Gross Merchandise Value

Explanation

Gross Merchandise Value is the sum of the RRP (Recommended Retail Price) of all items sold in a given period. Thus, it is before any deductions such as discounts, returns and taxes are made.

Due to that, it is not really a great measure of success as it can be easily inflated. It is still useful as a starting point in your P&L from which everything gets deducted.

Notes

We differentiate between Price Reductions & Discount Codes.

The Price Reductions Value shows if the price for an individual product was lowered - so if a Compare At Price was set. The Price Reduction does not include any additional reductions due to discount/voucher codes. These can be found in Discount Codes.

So, if a product used to cost €50 and you are now selling it for €40, then the Price Reduction Value ist €10.

The reason we differentiate between the two is that they usually have different purposes.

A discount a used to increase the sell-through of items that are not moving as quickly as anticipated whereas vouchers are mostly used by marketing to incentivize customers to buy.

Used in the following reports

Did this answer your question?