The Secret Behind Online Shopping Websites’ Discount Offers – How Do They Do It?

Online shopping has become a staple in our daily lives, with websites like Amazon, Flipkart, and Myntra offering a wide range of products at discounted prices. These discounts often leave us wondering – how do these companies manage to offer such significant price reductions without incurring losses? The answer lies in their strategic business models and marketing tactics. Let’s delve deeper into the secret behind these online shopping websites’ discount offers.

Understanding the Business Model

Online retailers operate on a different business model compared to traditional brick-and-mortar stores. They don’t have to bear the costs of maintaining physical stores, which includes rent, utilities, and staff salaries. This allows them to pass on these savings to customers in the form of discounts.

Volume-Based Discounts

One of the primary ways online retailers offer discounts is through volume-based pricing. They purchase products in large quantities from manufacturers or wholesalers, which allows them to negotiate lower prices. The savings are then passed on to the customers. This strategy not only attracts more customers but also increases the sales volume, further driving down the cost per unit.

Dynamic Pricing

Dynamic pricing is another strategy used by online retailers to offer discounts. This involves adjusting the price of a product based on its demand and supply, time of the day, and customer’s browsing and buying patterns. For instance, if a product is not selling well, the retailer might offer a discount to stimulate sales.

Marketing and Promotional Tactics

Discounts are also a part of the marketing and promotional tactics used by online retailers to attract new customers and retain existing ones. They offer discounts during festive seasons, on special occasions, or as part of flash sales. These discounts create a sense of urgency among customers, encouraging them to make a purchase.

Manufacturer’s Support

Sometimes, manufacturers support these discounts to clear their old stock or promote a new product. They either offer the products at a lower price to the online retailer or reimburse them for the discount offered.

Conclusion

In conclusion, the secret behind the discounts offered by online shopping websites lies in their strategic business models and marketing tactics. They leverage volume-based pricing, dynamic pricing, and promotional tactics to offer discounts. Additionally, they also receive support from manufacturers for certain discounts. So, the next time you see a discount offer on an online shopping website, you’ll know how they do it without incurring losses.