Selling a product lower than the standard retail price is labelled as price dumping amongst the domestic market.
This situation often happens to businesses that sell or distribute its products through multi-layered agents or resellers. Continually, agents and resellers rather sell the products at a lower price than the standard retail price to reduce its stocks or to gain higher commission and power within the pool of sellers.
Price dumping is likely to give advantage to consumers as the same product is made available at a lower price by different sellers. Agents or resellers that dump the prices are surely making a huge amount of sales while the rest of the sellers that are playing by the book will eventually lose out. The biggest threat now hits the manufacturer or business owner as their product's prices vary on the market which will affect their product and brand's trustworthiness and reputation.
Subsequently, agents playing by the book will tend to leave and the business owner itself will get affected by having lesser agents or resellers to sell its products, but most importantly, the product and brand's image will be largely affected.
Imagine this as a consumer; the baby formula for your children are priced at RM129.90 on your local supermarket shelf but the exact product appears to be sold at RM99.90 on the ecommerce website. What do you think of the product? Should I buy it online since it is cheaper!? But, could it be fake? Now, what do you think of the brand? There are some other brands that offer the same thing…
What if price dumping happens to your products?