How Flipkart is able to keep its product's pricing low ?

Hey Guys, Today in this digitized world we can do lots of thing while using desktop or mobile. One of the most cost effective thing that has evolved over the years with evolution of internet is online shopping, often referred to as e-commerce. E-commerce business has flourished with a great bang over the years. Major players of e-commerce are Flipkart, Snapdeal, Jabong, myntra and lots more. We have often seen that products available on these websites are most of the times are ver cheap as compared to market. In-spite of having so much of competition they are able to maintain there pricing.

So today, Lets see how they are able to keep there prices low and how the pricing is decided. (Lets take an example of FLIPKART)

Few important thing to look upon.
1. How they are deciding the prices.
2. How Flipkart or any other company(e-commerce or otherwise) optimizes their pricing.
3. How Flipkart or any other company(like e-commerce) compares to competitors.

What is their general pricing strategy ?

So, Without going into many details below is how there pricing can be decided.
1. Operating Margins :- Specially determining what a company earns to sustain or save business and turn heavy a profits.
2. Strategic pricing :- Basically deciding an overall pricing strategy where some of the products are given at a higher discounts in order to sustain in market.

They maintain their pricing in such a manner, that they keep a balance of prices keeping some high demand products at slightly lower prices and balancing that price somewhere else.
Always a thumb rule that no company can survive with losses, So maintaining a balance with profit and loss, and recovering from losses is their prime moto.




So lets have a look at the major cost factors that may affect the E-Commerce:
1. Supply Chain(procurement and shipping):
This mainly involves a very deep understanding of where the suppliers or vendors are and where the end customers are so that when a any one orders a product, it can reach him with minimum cost spent and minimum time safely.
This also means that customer demands are anticipated and pro active steps are taken so that all the products are ready to be delivered from the point ie closest to the customer before he even place the order.

2. Manpower and time spent on each order :
In India, its always a "jugaad" that keeps a system alive, however, we will have to understand that all the operations have to be made sustainable and most importantly scalable for an ultimate long term growth of organisation. From what way a person takes to pick a product to how much time he takes to pack a product and have to be looked at, and it is when any company works on optimizing all the related processes then a company really starts to get an edge.



Flipkart v/s Rest Other Players
So Guys, if you are able to survive through the above entire monologue, I feel you will see that Flipkart's Pricing is very competitive because it is working at all levels. They are having special departments for doing all the above processes (Optimizing and all)
And I know that lot of people here must be thinking that competitors have cheaper pricing, well that is mainly for the first point ("strategic pricing"), it is still to be decided that who comes out on top, Though I personally believe that there is still lot of space for all e-commerce to coexist.