You must be wondering as to how do online retail companies provide so many discount code for their customers and still manage to earn a profit. Well, continue reading.
Online websites don’t actually sell the items listed on their website by themselves but they are just websites where the retail companies advertise and sell their products. Now the retail companies have to follow some guidelines given by these online website franchises like Myntra, Flipkart, Amazon, etc. Some of the guidelines are that the retail companies have to list their products at 30%, 40 %, 50% off and the money they get from a sale will be split in a certain ratio between the online franchise and the retail company.
For example, if a product is priced at 4000 rupees then a sale of 50% will be put on it, so the product will be now priced at 2000 rupees . Now suppose you like the product and the extravagant 50% discount coupon makes you really happy , so you decide to buy the product . Now the 2000 rupees will be split amongst the online franchise and the retail company equally so each gets 1000 rupees. This is just an approximate amount and some taxes will obviously be levied on it.
Now where is the catch? How much profit do the companies make by selling a product worth 4000 rupees for 1000 rupees? The fact is that when you put your product on the internet you break away from the boundaries of a store, and make your brand global. Your product is available to the entire world and not to some selected people in selected cities. And mind you, this is a way of advertising your product for free and making yourself known in every household with an internet connection.
If brands would be selling from just conventional stores then they would have had to advertise their products which would cost them more money. In addition, they had to bear costs like buying property to set up their stores and paying land tax, then the retailers would have to build their stores which would take another monumental amount .
After that they would have had to maintain the store, pay for electricity, workers, staff, etc. Trust me, all these costs added up come to a monumental amount something that you won’t have to pay if you advertise your clothes on online marketplaces. So instead of investing money in building up a store from scratch, the companies provide discount codes to attract customers and to sell their products on a much larger scale and number .
You must understand that buying online is much more attractive for the customer than going to a retail store. Visiting a retail store takes time and energy which is very scarce in today’s world. The customer service option is available all day long for the customers to call and ask for queries and the product is being delivered to their doorstep in very minimum time . Also if the product is defected, you can ask for an easy return or exchange, while sitting in your home. The most important fact is that customers are acquiring products from their trusted brands all round the year for very less price comparatively, which is the exactly the reason that these online brands have grown so much, so fast.
So you see how fast a brilliant idea grows. Its all about marketing your product and making your product look attractive. The better you market the richer you get!