Discounts are rebates or reduction on the normal price of a product or service. They help you to buy things at a price lower than the usual.
* It can be given by the manufacturer, which is generally printed on the package.
* It can be provided by the retailer, which is attached to the item on a sticker.
* It can also be provided at the point of purchase on the sale price by the seller.
There are many reasons why these deductions are allowed. Broadly speaking the reasons may be to increase the sales in the short term, it can be to sell out-dated or old stock, to encourage customers so that they purchase more, or as a token of appreciation for valuable customers. Whatever the reason, the company offering a discount never suffers a loss by doing this. In some rare cases, it may be a temporary loss situation, but in the long run they reap handsome profits.
Online Sales Offering Discounts
A new type of sales strategy, which is online sales, has taken up this discount strategy to build on the customer base. They offer huge discounts on the products purchased online from their websites. And if we go by the popularity of these websites, this method seems to be working well with the new generation.
Companies offering rebate on these articles, are actually not doing it at a loss, as they are saving on their production cost. Some of these expenses may be transportation, rent or cost of the store, payment to middlemen and salesmen, and much more. These companies may further have different schemes of price reduction like having special offers for those using a particular credit card, special rates for a specific period, or additional products.