Why Flipkart and Amazon Give So Big discounts ?

By Startup Authority September 14

Everyone uses e-commerce sites to make purchases, but are you aware of the causes behind Amazon's and Flipkart's enormous discounts? If not, you can read this article in its entirety to learn why they are making such generous discounts on so many different products.

Due to the lower prices of products in the internet market as compared to offline markets, everyone nowadays prefers to shop online instead of visiting physical stores.

How Amazon & Flipkart give such huge discounts during sale ?

Reason 1 : Stock Clearance

The sales are often held in the months of September, October, and November toward the end of each year. Stock clearance sales are another name for the sales. Because every product has a follow-up product the following year, they offered significant discounts on older products during these sales to get rid of the old stock.

However, in more recent times, companies have launched their products twice during the year, particularly in the mobile phone industry, where every company launched their new mobile within a 2-month window.

In order to get rid of the current supply, they also offer discounts on previous products.

Reason 2: Cut out The Competetion

They provide a lot more discounts in order to remain competitive and thrive in the market. Every business is attempting to maintain its position at the top of the e-commerce market share as a result of the extremely rapid growth of online marketing and e-commerce in recent years. Discounts are provided to remain favourite of the customers.

Reason 3: Discount by Company

Amazon and Flipkart propose the amount of discounts to their sellers on products after comparing pricing with other websites, but they don't compel them to use the advised rates. Amazon, however, pays for the discounts, so sellers end up keeping these suggested rates.

It operates as follows: at the conclusion of a set time period, vendors submit Amazon a debit note dubbed "promotional funding," which includes the amount of discounts they provided on fashion, electronics, toys, and other items sold on the website.

Amazon subsequently sends a check to the seller and, in some situations, includes a margin payment as well. This debit note is in addition to any payments the customer makes to Amazon.

Reason 3: Combined Discount by Sellers & Company

Discounts are offered during the deals, depending on the sellers who use the websites Flipkart or Amazon to sell their products as well as the corporations Flipkart or Amazon. For our pleasure, they both in this instance somewhat cut their respective profit margins and provided a discount on the actual product.

It basically means that sites like Amazon or Flipkart collaborate with banks and promote the banks on their site in return for certain sales from the bank on their products.

Conclusion

Although people commonly believe that e-commerce companies pay for the 10% discount on credit or debit cards, this is not always the case. The bank itself is liable for customers' 10% or 15% discounts on credit or debit cards. These savings will go to banks rather than the website.

A few well-known brands lower their own pricing for certain products. Some distributors also independently lower the price of the good to encourage additional sales.

Should we purchase products during sale on amazon & flipkart ?

Yes, these sale results in best competetive price of products on various marketplaces including amazon, flipkart meesho etc.

What is the quality of products purchased in sale ?

Their is nothing wrong with the products purchased during sale, these are just promotional activities offered by platforms. However if their is some issue with quality of the products, these products have easy return & replacement policies.