If you are a customer, I’m pretty sure that your eyes and ears are always open for the next big seasonal sale of the year. The discounts, deals and cash-back promotions just make you want to spend all your savings on that particular day. Similar to customers, business owners also wait for such seasonal sales so they can also see their sales make new records.
However, do you really think that selling a product on a 50% off sale can get you high profits? To be honest, all we see on the latest eCommerce news that hits the charts is billions of dollars of sales. Like Alibaba’s Singles’ Day Shopping Festival crossed $25 billion. Have you ever thought about how much profit they actually made out of the $25 billion sales?
According to a survey conducted by CNBC with 350 global retailers, an eCommerce website is only making a profit of 10%. After deducting high parcel refusals, shipping costs and labour wages, a profit margin of 10% doesn’t seem enough to absorb the additional discounts that you offer. After evaluating all the numbers, it looks more like an eCommerce marketing tactic to simply generate more traffic. Without any doubt, this method is considered pretty good to attract new customers, and sometimes it could even produce a short-term loss. However, in the long-term with a higher rate of client retention, you may experience a significant rise in your annual ROI.
Having that said, let’s take a look at how all stakeholders benefit from these so-called ‘seasonal sales.’
Many retailers actually do make good profits in seasonal sales with the help of grey tactics that display fake prices. They simply increase the original prices of their products to show more significant cuts to their customers. Apart from that, many even design the original prices in such a way that the discounts are already built-in.
2. SHIPPING COMPANIES
Probably, shipping companies that transport the products from seller to buyer are the ones that gain the most out of these sales. Though it increases their workload a lot, they simply love it. Apart from that, now many shipping companies have also started helping shoppers purchase products from eCommerce websites that don’t offer to ship in their region. These emerging shipping companies are reliable and affordable for customers. Here are a few shipping companies that serve this purpose.
- BUY&SHIP (Provide a service to people of Southeast Asia to shop internationally)
- Tenso Japan (Helps customers purchase products from various Japanese websites)
- Peeka (Provide assistance to people who wish to buy products from China)
3. ECOMMERCE PLATFORMS
Are you familiar with some of the best ecommerce platforms? If not, they are the ones that have provided many ecommerce businesses the opportunity to become recognized in the first place. Wondering how they benefit? To be precise, ecommerce platforms charge a commission on every sale you make through them. They don’t care about your profit margin, as their entire interest is in your sales volume. The more you sell, the more they earn. Some of the best ecommerce platforms in the world are,
With all the other stakeholders winning with their nature of business, customers simply love these sales. Even though the chances are that many companies use grey tactics to sell their products, you can still manage to get your hands on some of the best deals in town. You can benefit from those businesses that use these seasonal sales as an ecommerce marketing tactic that doesn’t focus on profits.
It’s better to purchase products from websites that you regularly visit and buy from. That way, you’ll be familiar with the actual prices of the products you plan on buying when the time comes. If you go for new websites, the risk of getting fooled will always prevail.
For years many people thought that ecommerce giants are making billions of dollars from seasonal sales like Christmas, Black Friday, and Cyber Monday. However, with all the research, this myth just had to be buried. If you think these websites are giving you a favour, or they’re doing it for the spirit of the season, wrong again.
The primary reason behind these sales is marketing and brand awareness. Go back a decade, and you may not even consider buying from Amazon. However, with various digital marketing techniques and trends, online stores have turned out to rule the industry. In fact, they have caused many big companies like Blockbuster and Toy R Us to run out of business. Experts believe that the online market still has much more potential to grow in the years to come. However, there are still many people who aren’t comfortable shopping online. We’ll just have to wait and see if new records are made this year or not.