How does big basket and Dmart have much lower price than our neighbourhood grocer, with good quality. | Candider
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tusharrane1995
How does big basket and Dmart have much lower price than our neighbourhood grocer, with good quality.
9th Feb 2020 11:32 pm
economics
Business expert
The following result is obtained by our Real-Time Research: Following are the reasons how D'mart, Big Basket and other organization like them sell quality products at less price - 1. Direct selling - Instead of buying products and resell them to the consumer, these platforms invite manufacturers to sell their product directly to the consumer by themselves. Local stores have less price flexibility and have to sell products at a price around MRP, the manufacturer has the flexibility to price it at their own choice. 2. Slotting fees - these organzations charge slotting fees from manufacturers to display their product at their stores and use slotting fees to provide an extra discount. 3. Store ownership - D mart buys land instead of renting them and Big Basket don't need physical presence, hence they don't charge renting expenses (indirectly) from their customers. 4. Negotiation - These organizations enjoy their power to negotiate the price of the product as they are dealing directly with the manufacturer. 5. Volume sales - These organization enjoys extra discount as a large volume of sales has been done by them because the volume of people visits them daily.
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