Sasto Deal announced their “The Great Electronic Sale” from June 7th to 14th. They’re giving away a number of electronic products at certain discounts that certainly seems appealing to Nepali customers. This kind of trend has been around a while. Other bigger companies like Flipkart, SnapDeal, Amazon have been giving away products at relatively low cost by creating a particular event.
While there might be various factors backing as on why companies do that, people don’t think about it that much. With very few newly released products on the list, Sasto Deal might be trying to convince people to purchase old products that wouldn’t be of much value in the future (Strictly speaking in my opinion, the products may be valuable to individual customers). Clearing their old stock helps them in many ways as a business organization. First of all, clearing old stock might increase value-based customer traffic since the customers can afford good products at low price. On the same hand, the sales are going to increase, the attendance of customers is going to be high.
The fast change of trends might also be one of the reasons for creating such event. People want to buy something that’s relevant to them at the current time. For example, iPhone 4, yes it performs great, but the majority wouldn’t buy iPhone 4 at this time. Therefore, selling products before their trend runs out is a good strategy for a company, especially in the case of electronic goods.
Some companies might mock their strategy but at the end of the day, they’re all the same. You can call it “regular discount” or “great electronic sale,” in the end, all you’re trying to do is save your backs.
Another thing that customers need to understand about these kinds of sales is that you are not getting anything for free. These are retailers trying to sell you the products, which means the price was already hiked much more than the original cost in the beginning (Say the retailer bought a product for 1000 rupees, they might have set the initial price around 4000 or 5000). So now when they’re offering 50% discount, they still have a good amount of profit in their hands. The seemingly high discount rate and the limited time frame of the sales lure customers to buy the products (a lot), and in the end, the retailers end up making a decent amount of money for themselves.
Not only that, let’s suppose they become successful and were able to attract a lot of consumers, now those consumers are going to come back and purchase more in the future, this not only helps the retailers to make more profit but also the brands’ market coverage is going to grow. Even if they sell some products with smallest profit margin, the lifetime value that a consumer spends buying their products will cover all their losses in the past.
If retailers would honestly sell the products at decent discounts, there must be fluctuation in the rate of profit margin, but usually, the profit margins do not change, meaning they do not give you anything at a real discount and even if they offer some, they get everything else they want in return.
Therefore, think before you jump into these pits of “massive discount sales”. Be wise, don’t let them be in charge of your necessities.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of TechLekh)