What is a Flash Sale in eCommerce? 10 Short and Simple Tricks to Run a Successful Flash Sale in 2023
These days, with everyone having a mobile phone and access to cheap, unlimited data, customers constantly browse various eCommerce marketplaces and try to keep their eyes peeled for the best possible deals and discounts. If they find something that catches their fancy at a reasonable rate, then they either buy it on the spot or keep it in their cart/wishlist to buy it later.
There are also people who wait for festive season offers and flash sales in eCommerce to purchase items when the time is right. It will enable your store to get positive feedback from customers who leave reviews talking about how they purchased items for a highly discounted price. Such short-period discounts are also called flash sales in eCommerce, where a seller offers large discounts to either promote a product or get rid of inventory.
Customers constantly scout for beneficial flash sales in eCommerce. It motivates people to buy products in bulk because they know they are getting a good deal. It is a win-win situation for both buyers and sellers. As a seller, you need to capitalize on these sales in order to generate buzz around your product.
- What is a Flash Sale in eCommerce?
- What are the Benefits of Running a Flash Sale in eCommerce?
- Hindrance of a Flash Sale in eCommerce
- 10 Ways to Run a Flash Sale Successfully in 2023
- Reasons Why a Flash Sale in eCommerce Fail and How to Avoid Them
- Conclusion: How can WareIQ Help You to Run a Flash Sale in eCommerce?
- Flash Sale in eCommerce: FAQs
What is a Flash Sale in eCommerce?
A flash sale in eCommerce is a promotional short-term sale on various products offered by eCommerce stores. Mostly, it lasts for less than a day up to a maximum period of three days.
The goal is to tempt online buyers to buy on impulse, increase brand presence, occupy space in the mind of buyers, and increase customer loyalty. Also, it indirectly prompts buyers to check out other non-sale products listed on the same site by the same buyer.
It is a new era of sales and marketing strategy that has become quite popular as it ignites interest among online buyers, has a greater impact on social networks to increase recall value, and generates more CTR in mailing and ad campaigns.
It has resulted in great opportunities for selling a large number of products in a few hours and clearing up an inventory but a flash sale in eCommerce also requires preparation if you are expecting it to be a long-term profitable move. This psychology hits buyers and sparks excitement in their FOMO which encourages impulse buying.
WareIQ, an eCommerce fulfillment company, empowers online brands with a superior-tech platform to compete with Amazon like service levels by bringing their average delivery timelines from 5-10 days to 1-2 days.
What are the Benefits of Running a Flash Sale in eCommerce?
When you run a flash sale, you not only get a higher volume of orders and more revenue but you also get a lot more benefits than you generally would on a normal day. These benefits are:
When a seller provides a huge discount, they keep promoting it so it helps you to advertise your brand and brings more engagement to your products.
Gets Rid of Old and Unpopular Stock
It is an opportunity for a seller to get rid of the old stock by offering discounts. They can promote an unpopular product and also get rid of products that may not have selling potential and occupy the inventory space for long periods of time.
Increases Cash Flow
Cash flow in a business is a very essential thing. All start-ups, in spite of making millions and billions in profits, care about cash flow so that they can increase their profit margins and make their shareholders happy.
Frees Up Space for Inventory
Excess inventory, such as out-of-season items or deadstock, can be eliminated using flash sales. They aid in the reduction of inventory carrying and operating costs. Furthermore, if products have been accumulating dust in a warehouse, they can be moved out to create space for new, in-demand items.
Drives Sales Through FOMO
Customers dislike the feeling of missing out on something, especially a flash sale in eCommerce. You can entice potential buyers who have been waiting for the ideal price point by opting to run a flash sale.
Has a Large Impact on Social Media
The concept of a short-time eCommerce flash sale has a very huge impact on creating hype on social media and increasing traffic on your website or online marketplace. The buyer may come to buy discounted items but may start browsing for other products too, listed by the same seller.
Suggested Read: How does Flash Sales impact Online Consumer Behavior?
Helps in Generating Leads
When you run a flash sale, people can get discounts, sign-in, share their contact details, enable cookies and visit websites so it generates a lot of potential leads that a seller can use in the future as a push strategy to sell their products.
Improves the Reaction Rate
When you run a flash sale, it directs existing and new buyers to your page if they can get a good, discounted deal. Not only will they buy from you again but they will also suggest your products to others. Providing a high volume of sales in a short period of time can result in more social feedback and reviews from buyers.
Hindrance of a Flash Sale in eCommerce
As an online seller, you would have 1st hand experience that order fulfillment can be a tedious task. During a flash sale in eCommerce, you could get hundreds or thousands of orders daily from all over India, and then you need to deliver them as soon as possible, accurately. You can also take help from 3PL logistics companies but it can also be a testing time for them.
They need to take care of picking, packing, branded shipping, and delivering the order as soon as possible. It will ultimately ruin your brand image. If you are a multichannel seller and you run a flash sale on multiple channels, things get even more difficult.
You should expect more traffic and sales volume if you provide larger discounts when you run a flash sale. However, if you discount too much, you risk selling at levels where you lose money. Because a retailer’s average profit margin is roughly 50%, a flash sale in eCommerce where you give a buy-one-get-one-free deal or other lucrative discounts, will only allow you to break even at best if that margin applies to whatever you’re offering.
Groupon, which relied primarily on flash sales, saw its value plummet after becoming a publicly traded business, most likely as a result of undercutting profitability with flash discounts.
The results of a flash sale in eCommerce depend very much upon the timing of the sale. You should choose a time of day when demand would already be high. Research says the most active days of the week are Mondays to Thursdays. Graphs of purchases are higher in the first week of the month as people get salaries and they can finally order items in their kart or wishlist.
If a seller runs a flash sale when buyers are less interested and there is less demand, purchases may not result in the product category you were aiming for. You should never run a flash sale during a dip in general demand. Rather, you can have an end-of-season sale.
10 Ways to Run a Flash Sale Successfully in 2023
Define the Goal of the Flash Sale
Planning is should be the very first step before starting with anything else. In this situation, since a seller is planning to run a flash sale, they need to make the checklist of the following:
- A seller must offer a good discount but not enough that they may have to suffer later.
- If a product is unavailable in the market, they shouldn’t decrease its price of it.
- They should scale the demand and limit the supply.
- They should plan for how long they are going to run a flash sale.
- They need to find delivery partners that are ready to fulfill across the nation.
- If the flash sale is being run across multiple channels, sellers should identify ways they can track the data.
- They should assess the expenses associated with it and figure out their cost-bearing capacity.
Choose Your Target Market
When we talk about quality over quantity, we are referring to how we should try and serve or cater to our target customers. A seller should identify which customers would be interested in their product and also if they’d be able to afford it. If the above criteria are not fulfilled, there is very less probability that they will end up purchasing your products.
Suppose you sell computers and other electronics and you are willing to run a flash sale of graphic cards, you would not target children or people who are old. This is because children would not have the financial capabilities of purchasing the items and elderly people would not be interested in them. The ideal target audience would be in the age group of 18-35, college students, and young working professionals.
Now that you have identified your target market and the right product, invest your energy there to get a good result.
Choose the Duration of the Sale
Once you have chosen your target audience, you need to shortlist the perfect time to implement it.
You may choose the weekend if you have a lot of inventory or vice-versa. You can either implement a flash sale in eCommerce during a festival if you have old stock or offer the sale post-festival when your stock accumulates.
After you decide on the time, decide on the duration of the sale. It could range from minutes to days. The ideal duration of an eCommerce flash sale is around 72 hours.
Promote the Sale to Target Customers
After you choose the target market and the perfect time and duration to launch the sale, it’s time to tell the world about your offer. Design your promotional material so that it resonates with your audience. Try to start promoting a week before so that many people will be aware of it, save your products in a wishlist, set a reminder, and collect money for the product. As the sale approaches, keep sending out reminders and messages.
Plan the Sale Clearly
An impactful message is able to communicate with the reader/customer. It should be descriptive about what you are offering when you are offering it and on top of all, what your company strives for. To design an eye-catching message, you can go through the following:
- The offer should be clearly visible
- Vibrant colors should be used
- Use words like free, discount, sale, offer, etc.
- It should not consist of too many words
- Contain the features in bullet points
- Use good pictures of the product
- Design messages according to the medium
- On social media or email campaigns, do not forget to give a relevant CTA button
Run a Flash Sale for a Short Duration
Always try to offer a flash sale for a short period of time. When you run a flash sale for long periods of time, it has a negative impact on buyers. They may think that your products are not getting sold or there may be some manufacturing defects. Also, many customers don’t take long-period sales seriously. When a customer buys a product in a sale that only runs for a short period, they perceive it as getting a good deal. Long sales take away some of that prestige.
Keep Your Inventory Ready
Keep a perfect count and track of your inventory. You need to identify how many products you have, how many types and units you can add to the sale, where they are located, and what is the count of products in each warehouse.
Many times, the purpose of a flash sale is to clear old stock so sellers should take care of material rotation by applying First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or First-Expired, First-Out (FEFO) procedures.
Suggested Read: Inventory preparation for sales season
Partner with Trusted Shipping Companies
Until and unless your product reaches the customer, the purpose of the sale is not fulfilled. You have done the hard work of identifying your target group, designing the message for them, investing to increase items in your inventory, etc. And at the end of all this, if you do not have a delivery partner to deliver the product in a punctual manner, it will all be for nothing. You may never be able to attract those customers again. They will have a mindset that you cannot deliver at their address.
You as a seller should partner with numerous eCommerce logistics companies, selecting them based on their expertise in different situations and locations.
Aim for Customer Retention
The ultimate goal of the flash sale in eCommerce is to make the world aware of the brand, forge a new customer base, and retain old customers. A seller should always sell a product that is in good condition, despite selling it during a sale because once a seller ships a defective product, customers will not only return it, they will never buy from you again and will also give poor feedback that will impact other customers and customer feedback is king in eCommerce.
Measure the Results
You are operating a business so you must keep track of many things for paying your employee’s salary, operational costs, profit margins, etc.
When you have a flash sale in eCommerce, you need to think apart from monetary terms and calculate the ton-tangible profits that you earn from the flash sale. Measure how many items you sold, the total amount you got from sales, subtract the expenses and measure the profit, the number of people you reached, how many of them became repeat customers, whether you met their expectations, and many more factors.
Reasons Why a Flash Sale in eCommerce Fail and How to Avoid Them
Lack of Supply Chain Options
To be a good seller, you will have to place the utmost importance on delivery. You can run a flash sale and get orders but until you streamline your delivery process, you will lose money and customers. If you opt for prepaid orders, customers can ask for a refund, and incurring these extra expenditures will defeat the whole point of the sale.
Lack of Knowledge of Inventory Levels
If you are ready to have a flash sale in eCommerce, you need to assess your available inventory and which items would be a part of the sale. 2 situations can arise if you are not careful:
- Shortage of Items
Sometimes, if proper forecasting of demand and supply is not done, you can end up in a situation where you do not have enough inventory to fulfill orders.
- Over Stocking
Conversely, a lack of inventory forecasting can also lead to a surplus of inventory that you had not bargained for. Both these situations will result in extra expenses for the business.
To overcome such situations, use MOQ and EOQ techniques for maintaining inventory.
Your website is your virtual shop and is open 24/7, serving all the requirements of a buyer. It acts as a channel between you and your customers. If this communication channel breaks down, a buyer will not be able to browse or achieve what they wanted. After getting their attention and capturing their interest and desire, if they can’t get what they wanted, they won’t opt to purchase from you again.
Lack of Forecasting
Operating a business is an uncertain task so it will always be considered risky. A seller should be predictive. If a seller does not do proper forecasting and is incompetent in measuring market demand, they will make a mess of things. An eCommerce seller should think of all the inefficiencies that could take place during a flash sale in eCommerce and have alternatives like retail fulfillment in case of inventory shortages or COD in case of a high chance of reverse logistics.
Conclusion: How can WareIQ Help You to Run a Flash Sale in eCommerce?
A flash sale in eCommerce has many implications, both positive and negative. If done right, a seller can increase awareness and demand for their products and can have multiple orders in a short period of time. Conversely, if it is not implemented properly, sellers have a significant chance of running into losses and increased expenses. WareIQ can help your business to run a flash sale, by being able to integrate multiple eCommerce marketplaces with our custom WMS, which assists in inventory management and order tracking facilities, in one place.
WareIQ as a fulfillment partner will take care of the following aspects of running a flash sale in eCommerce:
- Receives and tracks orders across multi-channels
- Picking & Packing
- Ultra-fast delivery
- Order tracking facilities
- Takes care of COD orders
- Measures MOQ and EOQ
- Ensures a good delivery experience for customers
- Pan India Fulfillment & Darkstore Network: Plug-and-play fulfillment infrastructure with no minimums, which is compliant with Amazon Seller Flex, Flipkart Assured, Myntra and other marketplaces
- Inventory & Network Planning Excellence: Best-in-class AI models for sales forecasting, product segmentation, and inventory management to reduce inventory by 40% and increase revenue by 10%.
- Vertically Integrated Fulfillment Tech Stack: Our Fulfillment Tech Solution supports integrations with 20+ top marketplaces & D2C platforms, and prominent national, regional and hyperlocal couriers, enhancing reach by covering deliveries for 27,000+ pin codes
- Supply Chain Productivity Applications: Integrate a host of supply chain productivity apps with a single-click to your existing CRMs, ERPs & accounting software to manage your logistics workflows from one command center. Use Apps like RTO Shield to get 100% RTO protection, Branded Tracking to turn your order tracking page into a profitable marketing channel, and many more.
Trusted by 300+ top Indian brands, we are helping them accelerate online sales and expedite their growth through a synergistic combination of advanced technology, robust fulfillment infrastructure & seller enablement services!WareIQ is backed by leading global investors including Y Combinator, Funders Club, Flexport, Pioneer Fund, Soma Capital, and Emles Venture Partner.