Wednesday, 18 May 2016

How and why do the E-market places give huge discounts???

The major E-commerce sites like Amazon, Snapdeal, Flipkart etc offer huge discounts and deals to attract customers. The huge discounts given on the products in these E-commerce sites cannot be found at the same rate in the retail market or brick and mortar shops.

The question here is how can these E-commerce sites give such huge discounts and will they able to do it in the future? These are some of the reasons as to why and how the E-commerce sites give huge discounts:

The major reason being the support from investors who invest in these major E-commerce sites. The major national and international brands and business ventures invest in these E-commerce sites. 

The vendors who would like to sell their products on a less margin supply their products to the E-commerce sites in daily deals etc. The margin can be less on each product but the overall profit goes up based on the quantity. The E-commerce sites also sell the products on marginal profit.

The major brand sellers willingly sell their products to these E-commerce sites on a marginal profit. The advantage for these brand sellers is the advertising of their products.

The E-commerce sites give such huge discounts to attract a customer and make that customer a lifelong customer to the E-commerce site. The potential gain from each customer varies from thousands to lakhs if they are attracted to an E-commerce site.

The E-commerce sites even though they may not gain huge profits in the beginning or for some years they do worry much about that. These E-commerce sites look to attract as many online customers as possible so that they buy products in their sites. Even if there are no discounts, these customers will get used to buy in these E-commerce sites.

The question is 'Will these E-commerce sites be able to give the same discounts in the future?'. Many of the E-commerce experts predict that these E-commerce sites will not be able to give these kind of discounts in the future. Once the E-commerce sites are able to attract their share of online customers they will not be giving such benefits.And another reason being the government norms restricting the share of sales of an invidual vendor to the E-market place.

As there are many advantages other than the discounts, the sales in these E-commerce sites will not be reduced. And let us hope that the E-commerce sites continue to give the same discounts in the future.

SELLinALL is an E-commerce site/software which can be used to list products in major E-commerce sites like Amazon, Ebay, Flipkart, Lazada groups, Shopclues, Etsy etc.