Dumping - what is it? A question that many people have. There is a clear explanation in economic theory that this concept is characterized by a sharp artificial reduction in prices to enter a new market and crowd out competitors. The game of dumping is very dangerous, because it always leads to losses. And only firms with good financial support can afford such manipulations.
Bit of theory
What is dumping? The definition is as follows: this is the sale of goods and services by an enterprise at a price that is much less than the real cost. As can be seen from the definition, there can be no talk of any profit. The organization consciously takes this step to attract as many customers as possible, taking them from competitors. In many countries of the world, dumping is prohibited at the legislative level as a way of unfair competition.
But working at a loss is not the only sign of dumping. Sometimes prices fall, but this does not mean that it is artificial. The most likely characteristics of unfair struggle are:
- abandonment of normal profitability;
- low quality of services and goods, lack of service;
- high level of competition in the industry;
- oligopolistic market.
Basic goals
Dumping - what is it: a conscious way to get a plus in the future period due to the number of buyers or an ugly method to remove the one who interferes? This phenomenon can be encountered at any step and in any industry. Do ordinary buyers suffer from this? Sometimes yes. When fraudulent firms or the terribly poor quality of products and the complete lack of service are hiding behind a small price, when it comes to services. We will deal with the main goals:
1. Capture new markets internationally. This is done with state support to bring the domestic producer to a new level.
2. Inside the industry to get rid of competitors. Most often, large retailers do this. First, they specifically set the price too low, wait for the competition to burn out, and then return the normal price. Such a move allows you to make incredible profits.
3. The method of state influence. Very well traced on the example of the banking sector. But we'll talk about this a bit later.
4. Huge popularity in the third world countries is gaining dumping with currency. In this case, dumping prices are a way to manipulate the course and enrich those who already have too much money.
The first example of dumping in the world
The development of capitalist relations and international trade falls mainly on the 70s of the last century. It was then that all markets were filled with various imported goods and world problems were just beginning to take shape. At that time, people were not familiar with the concept of "dumping." What is it, learned when there was a scandal with the Japanese company Sony.
It turned out that the company, supplying its televisions to the US market, deliberately reduced their cost by half. It was sometimes more profitable for the Japanese to buy American goods, deliver them to Japan, than to purchase similar products from their native manufacturer. In this case, dumping prices are a great example of entering a new market and gaining customer confidence. Sony in this case was lucky.
Bank dumping
Price dumping is very well manifested in the banking sector. With it, the state can pursue a cunning policy. For example, mortgage lending. To date, the rate on this type of product is always lower than on ordinary consumer loans.And many are trying to take a mortgage for the purchase of housing.
State banks or financial organizations in which state aid is involved, specially lower the mortgage rate so that it is not beneficial to competitors. In turn, commercial banks are forced to follow them and also reduce rates. According to statistics, banks can reduce the rate by 3% so as not to go into the red. And the state thus regulates the quantity and monetary capabilities of other private financial organizations. 
Currency dumping
Playing with currency is considered the most dangerous and most hidden to date. Now that all international organizations and antitrust committees are following everyone, it’s becoming more difficult to manipulate. But those who have unlimited access to power and money skillfully use their capabilities and artificially create crisis situations in the country.
So, currency dumping - what is it? In simple words, this is the export of goods at low prices at the moment when its own currency begins to depreciate (devaluation occurs - the depreciation of the domestic currency against others). The exporter, making operations with the currency, makes a profit, due to which it is possible to reduce prices in the foreign market.
The largest game has long been the United States. This country is the owner of the world currency, and having spread it around the world, it has created many small foci of ignition of financial problems. In general, there are a lot of problems in the USA. But instead of solving them inside, they shift them onto the shoulders of other, small and not very wealthy states. 
findings
Dumping is primarily a method of unfair struggle. But it is most dangerous when it is conducted by the state to ensure the personal interests of the richest people. Most often, this leads to protracted crises. And all crises, as you know, arise either because of the inability to manage financial flows, or because of the excessive greed of those who are at the top of the board. And unfortunately, there are a lot of examples in the modern world.