In the context of strong e-commerce development, many online sellers are facing a big question: Should they focus on sustainable growth or compete with discounting to win customers? Most e-commerce platforms such as Shopee, Lazada, Tiki or Amazon are witnessing fierce price competition.
Many sellers choose to continuously reduce prices to attract consumers. However, is this strategy really effective in the long term? Or is it just a trap that makes businesses fall into a vicious cycle of low profits and dependence on e-commerce platforms? Let's analyze these two strategies in detail and find the optimal path to help online sellers develop sustainably.
2. 2. PRICE REDUCTION RACE: UNPREDICTABLE RISKS 2.1. Attract customers quickly : Low price is the most important factor when customers shop online. A price lower than competitors will easily increase orders.
Gain market share from competitors : When brazil telegram data other stores also reduce prices, retailers are forced to keep up to avoid losing customers. Take advantage of promotions from e-commerce platforms : Many e-commerce platforms encourage deep discounts to increase sales.
Clearing inventory : Discounting is the fastest way to free up capital, especially in the fashion and electronics industries. 2.2. Consequences of continuous price reduction Thin profit margins : When prices fall but operating costs don’t, sellers have no choice but to sell more to maintain profits.
This puts a strain on business. Customers wait for promotions : Once customers get used to low prices, they will not buy unless there are promotions. This creates a vicious cycle. Loss of brand value : Constant discounts make the product lose its value in the eyes of customers, they will see your product as a cheap item.