avi
Keymaster
How Flipkart, Amazon and Snapdeal fund discounts
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rdst_1
Juggernaut
They have clearly stated how the prices are fixed and even given the mode of payment used for subsidizing the products. What more clarity can they provide?
I Guess i already posted this in the Bigbillion fail thread. https://www.techenclave.com/communi...bigbillionday-sale.169388/page-2#post-1985604
I have a friend who works for company which has retail stores and also sells online not only on company website but also on these e-commerce sites ( dont ask me which company ).
According to him, these e commerce sites are bullying their way in just to make volume sales which is their top priority.
They in many case forego commissions or keep their margin to bare minimum ( or sometime losses also ) so that the sellers can sell at the lowest price possible but in bulk.
The idea of bulk selling is to show numbers of sales rather than revenue on sales because of the large funding to sustain over the coming years.
Many companies have official MoU ( memorandum of understanding ) & have provided *strict* instructions to these websites about the minimum price which is the limit below which a product cannot be sold. Yet these sites are using the excuse of sellers deciding the price while they work with the same sellers to reduce prices further. Some of these ecommerce sites take from 1 to 2 weeks to change prices even after repeated requests by companies.
Now some interesting issues that companies are facing today which many might not know :
1. Customers coming to their store and showing Flipkart/snapdeal/amazon prices and asking why is it expensive in the store and leaving.
2. Sales people on the floor with targets are in a terrible situation as they are not able to achieve targets given.
3. This Diwali has been one of the worst in terms of sales numbers for various retail sectors. Wait till the numbers come out in sometime.
Companies dont mind if the sales come from any medium, online or not.
But there is this weird syndrome like situation where people visit a store, they like a product and try it out but dont buy it, then go online and seeing the product being sold for less online, end up NOT buying it. The reason being they either lose interest till the time they are online or just keep waiting for offers like cashbacks or discounts on CC/DC/Netbanking to come through to buy even cheaper.
So sale is lost. MNC retail companies can handle this as India accounts for low revenue numbers compared to US/Europe but Indian companies are facing the brunt.
According to him, these e commerce sites are bullying their way in just to make volume sales which is their top priority.
They in many case forego commissions or keep their margin to bare minimum ( or sometime losses also ) so that the sellers can sell at the lowest price possible but in bulk.
The idea of bulk selling is to show numbers of sales rather than revenue on sales because of the large funding to sustain over the coming years.
Many companies have official MoU ( memorandum of understanding ) & have provided *strict* instructions to these websites about the minimum price which is the limit below which a product cannot be sold. Yet these sites are using the excuse of sellers deciding the price while they work with the same sellers to reduce prices further. Some of these ecommerce sites take from 1 to 2 weeks to change prices even after repeated requests by companies.
Now some interesting issues that companies are facing today which many might not know :
1. Customers coming to their store and showing Flipkart/snapdeal/amazon prices and asking why is it expensive in the store and leaving.
2. Sales people on the floor with targets are in a terrible situation as they are not able to achieve targets given.
3. This Diwali has been one of the worst in terms of sales numbers for various retail sectors. Wait till the numbers come out in sometime.
Companies dont mind if the sales come from any medium, online or not.
But there is this weird syndrome like situation where people visit a store, they like a product and try it out but dont buy it, then go online and seeing the product being sold for less online, end up NOT buying it. The reason being they either lose interest till the time they are online or just keep waiting for offers like cashbacks or discounts on CC/DC/Netbanking to come through to buy even cheaper.
So sale is lost. MNC retail companies can handle this as India accounts for low revenue numbers compared to US/Europe but Indian companies are facing the brunt.
It's just too early to come to a conclusion like that. The Flipkart sale was an Indian Black Friday (no puns) in its infancy. The sales are just going to get bigger, the sales targets 5x 10x maybe.
Retailers must come up with more innovative ways to sell their products, foray into niche products which people won't buy just by looking at reviews on the net.
Maybe have a better market for used products. I was on an LED hunt recently and it was such a waste of time and energy. Salesmen have their own agenda to push for. The models you want are never present, they'll never allow you to compare 2 models side by side.
Why not use the top SKU searches online for TVs to gauge the interest of buyers and stock the best ones. Why not invest in some events to showcase the best LEDs each month? Have an Xbox event or a Movie event at stores (maybe the larger ones).
Invest more in B2B, Restros and Pubs in Calcutta need BIG screens not the puny ones in corners anyways.
10 years ago you Needed to visit a store to purchase a laptop or a phone, now with the kind of exposure we have to these "Basic necessities" it's much easier to make decisions without having the need to get a feel of the product. Price will always be a major major factor but let's not rule out a good customer experience.
Retailers must come up with more innovative ways to sell their products, foray into niche products which people won't buy just by looking at reviews on the net.
Maybe have a better market for used products. I was on an LED hunt recently and it was such a waste of time and energy. Salesmen have their own agenda to push for. The models you want are never present, they'll never allow you to compare 2 models side by side.
Why not use the top SKU searches online for TVs to gauge the interest of buyers and stock the best ones. Why not invest in some events to showcase the best LEDs each month? Have an Xbox event or a Movie event at stores (maybe the larger ones).
Invest more in B2B, Restros and Pubs in Calcutta need BIG screens not the puny ones in corners anyways.
10 years ago you Needed to visit a store to purchase a laptop or a phone, now with the kind of exposure we have to these "Basic necessities" it's much easier to make decisions without having the need to get a feel of the product. Price will always be a major major factor but let's not rule out a good customer experience.
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