By now, smartphone flash sales have become pretty much common. In fact, the trend has been spreading across, especially among smartphone manufacturers from the east. It was not long ago, when consumers used to despair such events, since there was always a high chance that they would be disappointed at the end of such a sale. Even with all the criticism that surrounds this mode of sale, flash sales are only getting more popular and for a reason or two.
Flash sales are particularly popular among new manufacturers or ones that are entering a new market. It’s not hard to figure out that all this is done to estimate the demand of the product before having a huge pile of unsold inventory sitting in the warehouse. A company can only be profitable if is is matching the demand in the market instead of having a huge oversupply problem. Given the wafer thin margins that the industry is accursed with, it makes such errors even more fatal. Be it HP with the original TouchPad tablet, or BlackBerry Z10, you’ll find plenty many such examples. Flash sales ensure make sure this problem never has to arise. By selling a very limited quantity the first time, manufacturers are easily able to predict the demand, by something as simple as the time it took for the batch to sell off completely. If the demand is huge, they can always come back in a short period of time with more inventory. However, a tepid response can prevent making further orders to the supplier and eventually discontinuing the product.
Flash sales also help maintain consumer interest. It is usually seen that phones that are sold in flash sales are talk of the town even after months, while even some of the big launches go unheard only after the first month post launch. What it allows for manufacturers is to have one model being sold for a longer period of time than it would have sold, had it been available openly. An excellent example of this is the OnePlus One. The phone has been selling at almost the same price since launch. While the margins were low initially, the drop in prices of the components with time (because that’s how the tech industry works) allowed OnePlus to make profits later on. No we’re not talking about two years time, but if a phone can sell well for even eight months in the current market, it is called a success. Also, such sales drive free publicity. Such events are usually long waited for and much hyped. Also, it is always easy to sell a few thousand units, as such, these sales become instant success and a point to brag about for these companies.
Yes, you might lose some customers in the process (the impatient ones and the impulsive shoppers), but in the end, the benefits of such sales far outweigh the cons. Recently Nokia entered the tablet market, and its first Android tablet was sold through flash sales. As a brand matures, it may choose to opt for regular sales over flash sales (afterall, they’ll need to drive volumes as well), but for smaller players, this mode of selling makes much more sense over traditional methods.