Item discounts must be assigned to products in order for them to be visible during a sale.
First, create your item discount.
Next, assign products to your new discount. Go to Products/Discounts and Charges/Assign products.
Select your chosen discount from the dropdown menu in the title bar -
Press Add Products and you will receive a new window to filter your products.
Use the given fields to filter your search for the products that you want to assign a discount. Increase the number of results if you know you have more than 100 to assign (if left at 100 not all products will receive the discount). Once search is pressed, the relevant products will appear in the right hand side.
Select all, or multiple select individual products and press Add.
You'll then see the page refresh and those items listed against the particular discount.