What Is A Fire Sale?
Business owners both online and off have long understood the value of holding a fire sale. It’s a highly effective way to accomplish a number of business goals. The least of which is raising a lot of money quickly.
You’ve no doubt seen these fire sales. Car dealers advertising, “Everything must go.” The online e-tailer who is clearing out their product catalog and practically giving everything away.
A Fire sale is defined as “an emergency clearance sale at greatly reduced prices. Originally, a sale of product that had been damaged by fire or that could no longer be stored because the storage facility had been destroyed by fire necessitating immediate sale or loss of value.”
However, as you well know, most fire sales have nothing to do with fires. It’s an old phrase that was carried along and re-applied to a way of doing business. Now it might be more clearly defined as a sale of assets at extremely low prices.
One common and effective model for a fire sale works like this:
You start out selling a product at a very low price, and then every few days, the price goes up. This usually lasts for 7-days, and then the offer is pulled off the table forever.
In other fire sale it involves selling a valuable package of items for such a tremendous bargain that people rush to your site to buy. If the package is really a bargain, it becomes irresistible, and your conversion rate skyrockets as do your profits. In this model you may notice the term “Package of items.”
If you’re turning away because you don’t have a number of items in your product catalog or you don’t have that many you want to discount significantly, know that many fire sales are held with other people’s products. We’re talking about joint venture partnerships, resell products and PLR.
One might think that a fire sale has everything to do with raising money fast. That’s not entirely true. While a fire sale is quite effective at generating cash quickly and there are definitely reasons to do this like:
- Family emergency
- Bankruptcy
- New business opportunity requiring lots of cash
A fire sale can actually work to help build and grow your business.
Why Fire Sales Work – Buying Triggers
Before we dive into why you might want to host a fire sale and what elements are required for success. It’s important to understand why fire sales work.
Price
There are many reasons fire sales work and the most obvious buying trigger that they tap into is price. We’re all looking for a bargain and when one is presented to us it’s often difficult to pass up the opportunity.
When products are cut down to ‘bargain basement’ prices or you’re ‘practically giving them away’ a very human and normal reaction is to take advantage of the low prices – even if the product isn’t something we need.
People buy based on emotional reasons first and foremost. This is why good sales copy always appeals to the emotions and the benefits – what problem are you solving for your prospect?
