Point of Sale (POS) Glossary
Undersell is when a retailer offers an item for a lower price than competitors. In some cases, a merchant may even price items below their acquisition cost to edge out a competitor or build loyalty to their store.
When a store decides to undersell an item, they may simply price it at a lower amount. Alternatively, they may set up sales and discounts with the item marked higher, but the actual cost at the point of sale register is lower after promotions. Deals such as buy one, get one free (BOGO), percentage discounts or other schemes applied by the POS during checkout can sometimes be more effective than just setting a low price.
Underselling can be tricky because it may cause competitors to discount their pricing on more items to compete and result in spiraling prices. Customers may also come to a store to cherry-pick the things that have been adjusted to below retail and not buy anything else.
Customers love promotions! Buyers are often pulled in by one deal and wind up buying regularly priced merchandise in addition to, or sometimes instead of your discounted items.
An eCommerce website is open 24/7 and accessible from all over the world. Being online and having physical store opens your business to a global market.