How discount works

[destello]

I have curiosity about How does Discount system works?
How company can afford 10% or sometime even more than 50% discount? If it somewhere related about stock clearance then at the end it lead them to loss not profit.
Is there really a Discount or it's marketing gimmick

 

[Skylar]

I have curiosity about How does Discount system works?
How company can afford 10% or sometime even more than 50% discount? If it somewhere related about stock clearance then at the end it lead them to loss not profit.
Is there really a Discount or it's marketing gimmick

A 50% discount is not a loss.
If it costs them 10 rupees to make a product and they sell it for 100 rupees, a 50% discount means they sell it for 50 rupees. In this case, they are still making a 40-rupee profit instead of 90 rupees.

The profit decreases, but they are not incurring a loss.

 

[destello]

So according to you we as end user never got deals right? As we using credit card for discount or online shopping, sales like BBD and Great indian festival fool us?
means we trapped into their strategy

 

[Skylar]

So according to you we as end user never got deals right? As we using credit card for discount or online shopping, sales like BBD and Great indian festival fool us?
means we trapped into their strategy

Your perspective is unconventional, but this is how business operates.

If you receive a 50% discount on a product, it’s a great deal.
If the discount is 60% to 70%, you are essentially getting the product for free.

 

[wcgxlr8]

I think it is very subjective and your question is too general to give an apt answer. In short, price markups is a marketing strategy and discounts too. If you have a more specific question, I can help answer it better.

 

[zacobite]

I have curiosity about How does Discount system works?
How company can afford 10% or sometime even more than 50% discount? If it somewhere related about stock clearance then at the end it lead them to loss not profit.
Is there really a Discount or it's marketing gimmick

Supply to Demand -

 

[knagar0078]

I'm amazed to see such a good reply from Skylar.
Actually its true that the cost of production is way lesser for the manufacturer than the price they are selling at.
You know the shirt you buy from a mall even include the part of mall rent, this is because they get the profit margin from each single pieces.
You are getting a discount only because the product is not in demand and when the demand arose the price of the product (mainly after stock out) this created a demand and people who need it will pay for it, even if they have to pay more.
So less profit initially but now more sales and more profit gradually.

This is a best strategy to buy things when it's least in demand, to get more and more discount.
When someone buys a AC in winters, they are not fool but just getting a 20% discount, which they can even use for getting a extended warranty for services.
My Dear you can't guess the right time for all the things but you can for a few...

Hope this help...

 

[_rohitsoni]

So according to you we as end user never got deals right? As we using credit card for discount or online shopping, sales like BBD and Great indian festival fool us?
means we trapped into their strategy

Not exactly true. Because we as end users shouldn't expect to get the product in exactly the same cost of manufacturing. There are n number of additional costs which seller adds into it before selling it to us. You can bypass one or two but not all. That's called a price markup.
Now, Flipkart/Amazon sources stuff in bulk from main dealer (cutting one additional cost of retail seller), in sales, manufacturer/seller also offer a discount (forgoing some profits to gain more number of buyers - Instead of earning Rs. 100 from 10 buyers, they target to earn Rs. 50 from 20 buyers).

Having said this, there are indeed some product on "sale" which are just a trap, here tools like price tracker helps.

A very miniscule products will actually be sold in less than the manufactured price just to clear the stock, unsold inventory is a huge cost to the seller and seller don't want dead stock in their warehouse. So, instead of blocking the place & resources with the dead stock (losing say 10rs a piece per day, they book an actual loss of 50rs a piece in hopes that once place and resources gets unblocked, they can get some high-demand products to sell at higher margins to make profit)