When you have a hammer, everything looks like a nail. And when you can discount, everything that’s wrong with your business looks like it can be solved by discounting.

But smart discounting is about knowing exactly what you want to achieve with each discount; in other words, you need a precise objective.

For instance, you might discount in a seasonal sale. In this case you’re aiming to clear the decks of your excess inventory rather than hold on to it till next season. For instance, discounts on swim-wear at the end of summer, or January discounts on holiday themed goods, fit the bill here. These discounts need to be pretty big to shift the stock, as most people don’t see the sense of buying a bikini in October.

You might want to use a discount to promote your product for a particular event, such as Fountain Pen Day or International Cat Day or Chinese New Year. If you’re in a niche, that can help you gain brand recognition and make your customers feel like you’re part of the same community. It’s particularly powerful if your brand is quite new in that niche.

You could also use a discount to accompany an influencer or social media promotion. In this case you might want the discounts to be offered exclusively through an influencer, for instance the video review of your product might contain a coupon code right at the end. In this case you probably don’t want to offer a deep discount; 10% is enough to give that little extra boost to potential customers’ motivation.

Discounts can be used to encourage larger orders. Often, those are packaged as buy one get one free, or three for the price of two, rather than as a percentage discount, though the way the numbers stack up for the seller is exactly the same as if an equivalent discount had been offered. You might package your FBA products up as a bundle or a multipack. This lets you shift higher volume.

Sometimes discounts are used to reward loyal customers. ‘Private sales’ or ‘tenth order’ discounts are nice ways to keep regular customers happy, or you can simply include a coupon code for the next order with every package that goes out. These don’t need to be very significant discounts; 10% is enough to leave customers with a nice feeling of having been recognized and rewarded, and that’s what you’re after, not a huge increase in sales.

You might use a discount offer to generate email leads. That’s the online equivalent of a restaurant having a raffle for everyone who leaves their business card. Again, a small discount will get good results here.

But sometimes you need the deep discounts. You need deeper discount to create a real buzz. You need deeper discounts to launch a new products and get over customers’ reluctance to change brands or try something new. And of course if you want to get rid of the last inventory of a discontinued product, you’ll want a deeper discount there as well. These are the times that Vipon can really help.

Let’s also remember the basic rules for a good discount campaign. First, make it simple for potential buyers to see what they’re getting as a discount, and to claim it. Your discount shouldn’t require advanced math to understand, and it shouldn’t be difficult to claim. If you want to have a treasure hunt with obscure clues and tricky calculations, have a treasure hunt! But you’ll need something a bit better than money off as a prize to make it work properly; a Willy Wonka golden ticket, or a year’s supply of gourmet coffee.

And secondly, have different coupons for different sources so you can check which campaigns or sites worked best. Monitoring your offers so you know what works for future campaigns is vital if you’re going to discount even more smartly in future!