What is Price Dumping for retail products?
Price dumping is the act of selling a product lower than the standard retail price in a particular domestic market.
This situation often happens to businesses that sell or distribute its products through multi-layered agents or resellers. These agents and resellers rather sell the products at a lower price than the standard retail price to reduce their stocks or to gain higher commission and power within the pool of sellers.
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.
On the other hand, price dumping is beneficial to consumers as the same product is made available at a lower price by different sellers. Agents or resellers who are dumping the prices are making a huge amount of sales while the rest of the sellers who are playing by the book will eventually lose out.
Subsequently, agents who are selling at retail prices may leave due to the difficulty in competing with the lower prices hence harder for them to close sales as well as the perceived unfairness in competition. The business owner himself will get affected by having lesser agents or resellers to sell his products, but most importantly, the product and brand's image will be largely affected.
Imagine products being priced differently in local supermarkets and on an e-commerce website.
What would consumers think of the product?
For business owners, this price dumping act by retailers or agents where there is discrepancy of pricing in official business websites and other outlets could lead to the consumer perceiving the cheaper product as being fake or less superior to the retail-priced product sold in the supermarket. Thus, he or she will be less confident in the product sold online that would ultimately affect its brand name and brand value.
Hence, we, at Packtica, help you, as a business owner, with price control to avoid the scenario above from happening. Our in-house Japan & US technology is able to track any form of price dumping, even if the retailer has removed the QR code and serial number. We offer money back guarantee to our clients if they follow our advice and flow but are not able to catch price dumping retailers.
What is Price Control for Retail Products?
There are essentially two types of price control, which are price floor and price ceiling. These two concepts are used in determining the price of retail products, based on supply and demand.
Price floor refers to the minimum price that retailers could sell at while price ceiling is the maximum retail price for a particular product. It is important to have price control for products to ensure their affordability and ensure equal access to the consumers. Controlling prices helps to fend off inflation and ensure market balance.
Check out how Packtica checkNow software system helps to ensure that there is price control and prevents price dumping.