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How does a company make money despite selling with discounts?

Asked by mazingerz88 (28796points) May 17th, 2014

A girlfriend of mine buys a clothing item once a week because she just can’t say no to the 40% or 50% discount. Told her I have a feeling they mark up the price high in the first place so when they lower it big time, they still get a lot of profit. Not really sure if i’m right.

What could be the different ways a company uses discounts to its advantage-? Is giving discounts a “farce” to lure in buyers-?

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