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How companies makes profit in the current discount era?

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I have few questions about how this companies make profit?

1) Why all the companies are giving so much discount and so much benefit if people use their application/ mobile app?

2) What is the benefit of Qukir ?
They provide home delivery and also gives cash back to buyer and seller both?

3) What is the benefit of PAYTM? They provide so much cash back if amount is paid through paytm.

4) We see lots of youtube channel and everyone wants us to subscribe their channel, so what is the benefit for them if they get more and more subscriber?

posted Mar 31, 2016 by anonymous

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1 Answer

+1 vote

In short no one is making profit. If you understand business, profit making is a very long cycle in company, and all these are platform which has even more longer cycle.

Now let me give you a glimpse, why platforms are attractive - Difference between cost of serving one customer or cost of serving a million customer is very less (its not millionth time). So investor loves platform.

Now challenges in platform business is to build the critical mass, before they can reap the benefit of the platform. So everyone is investing in building the scale not on the profit, which is coming by offering great discounts and the same loss is funded by the investors money. So in short all companies are concentrating on scale not on profit which is seen and in this fight few will survive and few will die off (a natural one 9 will die only one will survive). I hope this should answer your first three queries.

YouTube is also a platform but is selling experience and money is made by advertisement, hence subscribers are important which is a factor in ad rates.

answer Mar 31, 2016 by Salil Agrawal
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