Going on sale to compete with the market prices


Sometimes when the demand gets low the market prices go down naturally as per the law of supply and demand. Some companies would compete by slashing their selling price at the expense of smaller or no profit margin anymore. Their reason is just to dispose of the stocks so that they can replenish it with new stocks. It is a bigger problem when the stocks expire on the racks.


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This is actually the fate of any stock that takes too long to be sold off before the new brand version of the same product comes into fold. It's not about low demand actually but the need to push out the old products in the market that makes the company to slash the price as low as possible in order to clear out the products. It's actually called clearance sales over here.


I think it is not a wise move to fight the competition with lower prices. The scary scenario is when the competition reaches the extent of cut-throat competition that the price cut would be lower than the cost of the goods. Maybe what can be done is to employ a strong offensive in the marketing forefront.