Personal Finance

What Is A Flash Sale

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 5 minute read

What do websites like Fab.com, HauteLook, Zulily, and Gilt all have in common?
It’s easy to get them mixed up with group buying sites like Groupon and LivingSocial because they all offer deep discounts and are categorized as “flash sale” websites. The problem with flash sale websites is that the reductions are only good for a few hours, yet the product is in high demand.

It’s a common misconception that only women purchase on flash sale websites, but that’s not always the case. You can find anything to your liking. Last Bottle, in contrast to the mainstream Fab.com, hosts daily flash sales of unique wine mixes and varietals such pinot noir, chardonnay, and chianti. Everyone can find something they like at a flash sale website.

The appeal is undeniable, yet doubts unavoidably emerge. Just how can you determine the worth of a purchase in such a short time frame? Where do you find the information you need to make such a snap judgment about whether or not your bank account can manage it? 

Though there are many practical benefits to using such sites, it’s simple to get carried away by the allure of a great deal. Before you try out a flash sale website, it’s important to weigh the advantages and downsides.

Benefits of Flash Sale Sites

There’s a good reason why flash discounts are so alluring. People like the following benefits of online flash sales:

  1. Getting the Best Deals

Manufacturers utilize flash sale websites to move big quantities of merchandise quickly. However, they can only maintain the current rate for a limited time due to the steepness of the reductions. If you can act fast enough, you may take advantage of this situation to make substantial savings on a variety of goods. It’s a great approach to save money if you know exactly what you want.

  1. Finding New Manufacturers and Products

Online flash sales are a great way to discover brands and goods you would not have otherwise tried. Many unique or limited items may be found on Fab.com because the company only works with independent designers and manufacturers. Additionally, when you support a local enterprise, you may take pride in knowing that you’ve helped a fellow man out.

  1. Purchasing High-End Products at Reduced Prices

On occasion, you may be able to get genuine, high-quality name-brand items that would otherwise be out of your price range by shopping on flash sale sites.

Drawbacks of Flash Sale Sites

Be wary of the potential pitfalls of purchasing on flash sale sites. Think about these things before you commit.

  1. You May Experience Adrenaline Rush

As with any online auction site, flash sale websites play on your emotions to make a transaction. Professor of Marketing at Rice University Utpal Dholakia writes in Psychology Today that a limited time period for a sale might generate “participatory regret,” making you want to buy so as not to feel like you missed out. If you use deadly force without giving it any thought, you’ve fallen for the strategy.

  1. You may purchase products you do not require at prices you cannot afford.

Things that are ordinarily out of your price range may be tempting to buy during a flash sale. If you never spend more than $50 on a handbag, you probably won’t spend $500 on a designer one. But what if one can be purchased for under $250 on a flash sale website? It’s a bit pricey, but still appealing because it’s cheaper than retail. Keep in mind that just because something is on sale doesn’t imply it’s the greatest value for you while exploring these offerings.

  1. Exclusivity drives you to spend.

Think back on the old MasterCard commercials: “Membership has its advantages.” Feeling like you’re in on a secret when you score discounts via email or membership. An invitation may be required to participate in some flash sales, adding to the sense of exclusivity and prestige associated with membership.

How to Make the Most of Flash Sales

It is feasible to shop on flash sale websites without overpaying or unnecessary purchases. Before you join up for a subscription or purchase under the influence of an insider bargain, keep these guidelines in mind.

  1. Hit “Unsubscribe”

The moment you sign up for a flash sale website, you become a permanent member of their mailing list. It’s common practice for a fresh daily bargain, complete with cost and timer, to be delivered to your mailbox every day. Seeing all of those brand new things every day might be detrimental to a person’s financial well-being.

To conquer your spam problem, it’s best to opt out of automated email lists and instead make a conscious effort to hunt for sales when you have the time and resources to do so.

  1. Complete Your Homework

Companies will frequently offer flash bargains on subpar goods since they are aware that savvy shoppers will eventually uncover alternatives with higher quality or lower pricing. Don’t scratch where it itches; you can end up in hot water.

The truth may generally be found with a fast Google search or browse through Amazon. The best deals (and sometimes even free delivery) are typically to be found at brick-and-mortar establishments or online.

  1. Purposeful Shopping

If you’re just looking to pass some time, you should probably steer clear of these sites. You shouldn’t sign up for a flash sale site unless you absolutely need to or want to spend a lot of money on anything. Or save them for when you know you’ll need to make a large purchase, like a baby carriage or a new purse. Create a list of must-haves, including larger-ticket items, then shop with that list in mind.

  1. Make a Budget

If you can’t stop shopping flash bargains and have no plans to ever quit, at least try to limit your spending. Rather than seeing these buys as one big shopping expense, break them out into their own category and set up a certain amount each month. We recommend starting with a limit of $50 and logging out and leaving the site as soon as you’ve reached that amount.

  1. Be wary of “Benefits.”

Many flash-based shopping sites provide the option of cheap flat-rate delivery. To give just one example, Zulily provides free delivery for a whole day following your first purchase. That’s pretty awesome, right? Wrong. Don’t let a reduced delivery cost persuade you to make an irrational purchase. Consider this alternative: “Would I buy this if the delivery cost was full?” Remove it from your shopping basket if the answer is no. It is not possible to offset the cost of a flat rate delivery fee by making larger purchases.

The same is true for the other benefits of participation in a flash sale, such as access to hidden offers or discounts for bulk purchases. The purpose of flash sale websites is to make you spend money by appealing to your emotions. If you hadn’t found it on sale, would you have spent so much on a cashmere scarf? Don’t allow the cost of membership privileges ruin your financial plans.

Bottom Line

Trading’s perks and pitfalls have been around since the invention of the wheel. Every type of commerce has its pros and cons, whether it’s traditional retail, wholesale, or e-commerce. So, don’t fall for the marketing ploys. If you train yourself to spot sales pitches and prompt yourself to make savvy purchases, you can outmaneuver flash sale sites.

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