Decide what the promotion is for
A free-goods offer should have one job. It might push a new item onto shelves, clear stock before it ages, lift a slow line, or pass on goods a supplier is giving you. The job decides the item, the ratio and how long the offer runs.
Without a job, a promotion turns into a permanent price cut that customers come to expect, and ending it feels to them like a price rise.
- Launch: get a new item onto shelves
- Clearance: move stock before its expiry date
- Volume: lift orders on a slow line
- Supplier-funded: pass on goods the supplier gives you
TipWrite the goal and the planned end of the offer on one page before you set anything up.
Choose the ratio
The ratio is the offer. Work out what it gives away: the free quantity divided by everything the customer takes home. Buy 10, get 1 free is about 9% off the goods; buy 5, get 1 free is about 17%, which is a deep cut for most distributors.
The free item does not have to be the one bought. Giving a new or slower item free with a best-seller puts it in front of the shop’s own customers at no price to the shop, which is often the cheapest launch you can buy.
TipPick a ratio a rep can say in one breath; buy 10, get 1 sells itself, buy 13, get 2 does not.
Cost the free goods before you launch
Free goods are not free to you. Every free carton costs what you paid for it, plus the space on the van. Cost the promotion on the volume you expect it to sell, and set that against the margin on the extra sales it brings.
Then ask how much of that volume is truly extra. If 450 cartons would have sold anyway, only 150 are extra. At a margin of SAR 2.40 a carton they earn SAR 360.00, less than the SAR 396.00 the free goods cost.
TipIf a supplier is funding the free goods, have the agreement in writing before the first free carton leaves.
Give free goods in the unit sold
State the unit in the offer: buy 12 cartons, get 1 carton free. An offer that says only “get 1 free” is read as a carton by the shop and as a piece by the warehouse, and the argument starts at delivery.
Count rewards in whole multiples. A shop that buys 30 cartons on a buy 12, get 1 offer has earned two free cartons, not two and a half. Decide too what happens when two offers fit one order; each should pay on its own, because a shop that qualifies for both will get both.
Brief reps and customers
A promotion nobody hears about only rewards customers who were ordering anyway. Tell reps the item, the ratio, the goal and the planned end before the offer starts, and give each of them a number to aim for.
Customers hear it from the rep at the visit, and see it in the customer app if they order there. The free goods should appear on the order and the invoice as a line of their own at zero price, so the shop sees what it received and your stock count stays honest.
- Set up the promotion and check it on a test order
- Brief reps on the item, ratio, goal and planned end
- Tell customers at their next visit
- Watch the first week’s orders
- Switch the offer off the day it ends
End it on time and measure
The most common promotion mistake is letting it run. Customers start waiting for the offer before they reorder, and the promotion becomes your new price. Give one named person the job of switching it off.
Afterwards compare sales during the offer with the weeks before and after. A spike followed by a dip means shops stocked up at the lower price, not that demand grew; next time, shorten the offer or raise the ratio.
TipSwitch the offer off the evening it ends, before the next morning’s orders start to come in.
Checklist: Before you launch the next promotion
- Give the promotion one goal
- Work out the discount hidden in the ratio
- Cost the free goods on the expected volume
- Compare that cost with the extra margin
- State the unit and count whole multiples
- Brief reps before the offer starts
- Name the person who switches it off
- Switch the offer off the day it ends
- Compare sales before, during and after