So the Infinix Note 2 just went on sale today. Today! Jumia has an exclusive just as is almost always the case with most things Infinix these days. The device costs Kshs 12,499. Jumia is claiming on its site that that is a 48% discount. 48%! That it ought to retail at Kshs 23,999. Yet we can all bet that throughout the time the phone will be selling in Kenya or even elsewhere, it will never sell at that price. If you’re keen on Jumia and pricing of certain items (particularly smartphones) then you must have noticed this. It was the case with the Infinix Hot Note, the Infinix Hot and recently, the Infinix Hot 2. How does Jumia come up with these numbers? Does someone just wake up and decide that’s what they are going with or is it their own way of marketing since we’re tuned to rush for such “juicy discounts”?
They probably have deals with the manufacturer; Infinix knows that a large chunk of it’s sales come from Jumia hence, they can easily strike deals with them.
In this case, economies of scale also apply as Jumia can buy in bulk and will only have to pay for transport once (if they pay, otherwise Infinix might also be doing the delivery which makes it more cheaper).
So… those “Juicy discounts” are actually just deals - the manufacturing price of the Infinix Note 2 should be about 10K for them to afford such a cut.
Those can be actually just deals. In a supply chain of phones, the prices actually inflate due to many middlemen and transportation and tax of course. However striking a deal with the manufacturer to directly deliver to you in large batches means that you can sell at seemingly ‘ridiculous’ prices. Consider a galaxy S6 edge that costs $285 to manufacturer whilst it retails at more than $799. If the manufacturer was kind enough to let you get it from the factory to you shop - and if they are willing to cut the discounts they make - then selling at half price - $399.5 will still be profitable.
Yep,it all makes sense