Question

Does a retailer prefer buy one get one free or a 50% off sale? please explain in words.

Answer 1

Ans) BOGO !!!!

Technically speaking, a 50% off and buy one get one is same thing. But behavioral economics shows that people overvalue the benefits of "free" when compared to higher quality goods at the discount price (50% off).

It is the mind that tricks shoppers into thinking that they are getting something extra.

BOGO has been seen to be quite successful in recent years. Therefore, retailers prefer it over 50% off.

One reason for choosing BOGO is that it helps seller clear their less desirable inventory faster while maintaining the profitability.

Another reason is that it is more appealing than 50% off (psychology is at play here!)

So, clearly BOGO will be preferred by the sellers due to its appealability to the buyers and profitability to the sellers.