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Wholesale business is mainly about selling wholesale
products at a rate lower than the retail price. Competition is indeed getting
fiercer in modern wholesale industries. Lots of budding entrepreneurs are
opting for almost similar business endeavors. This has made it absolutely hard
for current businesses to survive and make their customers stay loyal to them.
It has become a challenge for every business to maintain their position in the
As inflation rises in the global market, people have got
more and more aware of the prices. This has compelled many of the wholesale
suppliers to offer really huge discounts. The prime reasons for these discounts
are to introduce new customers in business or to sustain the current customers
by rewarding them.
However, it has been noticed that big discounts and bargains ruin the potential
for business and as a result the business fails. It certainly offers temporary
profits but as time passes, their business gets spoiled and it
becomes less viable. Heavy discounts make you lose your brand identity. It is a
common observation that people consider products with heavy discounts as
inferior quality items. This is the main reason why branded companies never
offer too much discount. People continue to buy their products even though it
has exorbitant rates because these products are considered to be high quality
Heavy discounts by one brand forces other brands too to lower down their prices
to stay in the competition. This becomes a cycle because of which lots of
wholesale suppliers quit this industry.
If customers are offered a huge discount once, they expect it again and again.
Ultimately it leads to devaluing of the products and they start assuming
that their lower prices are reasonable enough according to the value they offer
to them. Customers expect discounts every day and if the company stops offering
discounts, it is bound to lose customers which leads to earning no profit at
all. The ball is in the court of customers and hence they are free to approach
another company which offers higher discounts than yours.