What is a flash sale?
A flash sale is a one time promotion in which a company offers discounted prices on the products and services it sells for a limited time. Flash sales are rapidly growing phenomenon on the internet. The explosive growth of sites like Fab.com and Zulily.com show that people are receptive to these types of sales.
Flash sales are great for companies with excess inventory. Flash sales allow business owners an opportunity to sell excess inventory while minimizing damage to the companies brand. After all, nobody wants to see what they bought last week on clearance. Read more about E-commerce business.
This marketing tactic helps promote sales because it forces customers to make a decision about whether or not they want the product. If a sale ends in 24 hours people know they will not be able to procrastinate on the purchase.
Here are some questions to ask yourself before starting a flash sale:
Do I want to do the sale on my own website?
This is a difficult question for many businesses because there is no one correct answer. There are some positives and negatives to each version of the sale.
The positive aspect of running a sale on your own site is that it makes sure that regular visitors of your website are aware of the sale. You also do not have to pay a third party a commission for selling your products. The negative part of doing a flash sale on your own site is that it can damage your brand. Regular visitors of the site will be upset that they paid the full retail price for your product. Regular customers might also be reluctant to make purchases of your product at full retail prices if they think that waiting for a flash sale will get them a better price in the future. This can be very damaging for the integrity of your brand. Consider that Louis Vuitton Moet Hennesy never sells Louis Vuitton products on sale. The company would rather destroy unsold inventory than offer it at discount prices and damage the reputation of the brand.
The best part of about running a flash sale through other companies is that it gives you exposure to potential new customers. People who like a particular flash sale site, who have never heard of your company, can see if they like your product. Flash sales through a third party can also help protect your brand. Your regular visitors only need to hear about the sale if you promote it on your site. The negative part of running a flash sale through a third party is that you must pay them a commission. This commission coupled with a discount off retail prices might make it impossible to make a profit on your product.
Is your product ready to ship?
One frequent complaint from flash sales customers is that it too long to ship a product. It is important that you have the ability to fulfill sales in a timely manner. Many websites that offer flash sales do have the business infrastructure to deliver these products quickly. Any good will that you might have engendered from offering a good price will be squandered by not delivery.
Do I have the right inventory?
Some products and services have very low profit margins. If this is the case for your company than you should think long and hard about offering discounts. If your company does decided to offer products at no or little profit than you should the price the sale as part of your marketing budget.
So…should you do a flash sale? If your positives are greater than the negatives, and in most cases they are, do a marketing experiment. But guard your brand by using a third party. It will cost a little more, but the security it provides is worth it. For this little effort, you may discover a powerful marketing tool that you will use over and over again.