MSG Team's other articles

11248 Services Marketing – Definition and its Importance

Stated simply, Services Marketing refers to the marketing of services as against tangible products. As already discussed, services are inherently intangible, are consumed simultaneously at the time of their production, cannot be stored, saved or resold once they have been used and service offerings are unique and cannot be exactly repeated even by the same […]

12538 Understanding Social Media Holds Key to Building Online Reputation

Difference between Traditional Advertising and Online Advertising on Social Media When it comes to Advertising in traditional media, the advertisers tend to focus on how to reach the masses at large. However when one looks at the Social Media and plans to design advertising, it becomes important to understand some of the basic differences that […]

12502 Brand Extension – A Success or Failure ?

Brand management has become quite a challenge for brand managers as well as the Organizations today. Intense competition and the decreasing product life of a brand add further dimensions to the brand management problem. Brand managers by and large opt for brand extensions now days. You can check any shelf in the super market and […]

8756 Multi Level Marketing (Network Marketing) – Meaning and Important Concepts

Some consider being Salesmanship to be an inborn trait as is Leadership. Some consider Salesmanship to be an Art. Then there are those who believe that anyone and everyone can be a Salesman with some training. Traditional concept of channel sales and retain sales as concepts are studied by every marketing and sales student. From […]

12136 Leveraging Influencer Partnerships in Social Media Marketing

Love them or hate them, there’s no denying the impact that influencers have on consumers purchasing decisions. Heard about influencer partnerships but not sure where to get started or if it’s the right marketing strategy for your business? You’re in the right place. In this article, we cover everything you need to know about influencer […]

Search with tags

  • No tags available.

Flash sales have become extremely popular these days. There are several websites which are dedicated to providing flash sale opportunities to their customers. Rue La La would be a great example of such a website. It exclusively sells products on flash sales and has a turnover of over $100 million.

On the other hand, there are some websites where there are intermittent flash sales. Some companies have adopted flash sales as the only method to sell their merchandise. A remarkable case of this is the company Xiaomi. This Chinese corporation is the largest seller of smartphones in India. However, these smartphones are not sold via shops or even online sales.

The company opens a short window of a few minutes every week to sell these products. This company is clocking revenue worth over a billion dollars and is only following the flash sale method to generate sales.

It would, therefore, be appropriate to say that flash sales have become very important in the marketing world. Yet, very few people know how a flash sale works and what goes on behind the scenes. In this article, we will have a closer look at what flash sales are.

What is a Flash Sale?

Flash sales are meant to sell products at deep discounts. In many cases, the product may be sold at their retail price. However, due to the high demand that these products face, they may be using the flash sale route to distribute the product to customers. However, the bottom line is that customers expect superior value from a flash sale. If there is no “special” offer on a product, people are not going to waste their time queuing up online to buy it.

It needs to be understood that flash sales are by no means a modern invention. Many brick and mortar stores have been using this model to sell slow moving stock. Flash sale websites are just aggregating the process and making it easier for the retailers.

For instance, earlier ten different retailers had to hold ten different sales. There were promotional costs involved and also this led to the dilution of the brand image. Flash sale websites, on the other hand, buy products from all the retailers at an even more discounted price. They then sell it to customers for a profit. This saves each store the trouble of organizing its own sale.

How Do Flash Sale Websites Operate?

  • Targeted Customer Base: Unlike retailers, flash sale websites do not have fixed products to sell. Instead, they are willing to sell whatever their customers are willing to buy.

    The first step in building a flash sale website is to have the database of a large number of customers. This database can be created by first selling few deeply discounted products at a loss. Once this database is created, the website can mail across the latest offers to these customers.

    A large customer database means more people will be informed about the offers. This means that more people are likely to buy and that the stock will be sold off at a faster rate.

  • Choosing The Product Mix: The next step in managing a flash sale website is to create a product mix that appeals to the target audience.

    For instance, if the target audience consists of many expectant mothers, then goods such as maternity clothing and kid’s apparel should be regularly offered for sale. If the product mix is not relevant, then the customer base will slowly lose interest in the website. This will mean lower sales turnover in the future and the eventual failure of the website.

  • Hype: Flash sales happen for a very short duration of time. This means that the products in these sales are sold within seconds. Many times, customers are not able to get these products even after several attempts. This creates an artificial scarcity. Scarcity creates hype.

    People start believing that the product must be of good quality and that is the reason that it is getting sold off so fast. This hype helps the company clock more sales than it would have done otherwise. This is the reason why flash sales are now preferred by several organizations

Challenges Facing Flash Sale Websites

  • Firstly, the competition that these retailers are facing is intense. There are many flash sale websites and each has to compete with the other to get business.

    In the process, they have ended up dropping the prices so low that it is no longer profitable for them to conduct business.

    This is the reason why many flash sale based websites which were earlier valued at over $1 billion were finally sold off for less than $100 million. Several of these firms have been laying off their employees too. Hence apart from a handful of successful firms, the other flash sale websites face several challenges and a grim future.

  • Lastly, the retail world in the United States and across the world is being dominated by Amazon.

    Flash sale websites are too small and do not have the capital required to compete with this global behemoth. This is the reason why many of them are struggling to survive<

To sum it up, flash sale websites had a promising business model. However, they are also facing a lot of challenges.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

After Sales Service/Customer Service

MSG Team

Different Types of Sales Professionals/People

MSG Team