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Comment by dustin

30% might work in software, but it's is a very deep discount for most physical retailers.

If the product has a 50% margin (sells for $100, costs $50 to source) then your retailer makes $100 for 5 orders instead of $50 for 1 order.

Except they're probably keeping their own inventory, so they now have to keep $250 of inventory for that $100 in profit, rather than $100. This is problematic because a lot of online retailers are limited by their working capital.

This is a drastically simplified example, but the bottom line is that physical retailers think very differently than software sellers.

Great idea for an app either way. I wish you the best of luck with it as you learn the territory. For something similar in the Amazon space (a platform that lends itself much less to split testing) check out splitly.com

parent dustin 6 years ago

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