The Kogan.com Ltd (ASX: KGN) share price is under significant pressure on Wednesday.

In morning trade, the e-commerce company's shares are down 27% to $5.15.

This follows the release of its third-quarter trading update.

For the three months ended 31 March, Kogan reported a 6.2% decline in gross sales to $178.3 million.

Management advised that this reflects a recalibration to its quality of revenue and focus on platform-based sales, which resulted in a significant reduction in inventories. This is part of the company's plan to reposition itself into a more capital-light business.

Kogan's revenue for the three months was down 2.4% over the prior corresponding period to $105.9 million for the same reasons.

But thanks to a 5.2 percentage point improvement in its gross margin to 36.8%, Kogan's gross profit lifted 13.8% to $39 million. Management advised that this was underpinned by a larger contribution from platform-based sales and improved profitability of in-warehouse inventory sales after the prior sell-through of excess inventory.

Adjusted EBITDA came in at $9 million and adjusted EBIT was $5.3 million for the three months. Both are up strongly on the prior corresponding period.

At the end of the period, Kogan had a cash balance of $34.1 million. This is down by $49.2 million from $83.3 million at the end of December despite only spending $5.8 million on its share buyback program during the three months.

Group active customers were 2,660,000 at the end of March, comprising 1,950,000 for Kogan.com and 710,000 for Mighty Ape. This is down 3.1% from 2,744,000 at the end of the first half.

Kogan FIRST subscribers were 472,000 at the end of the quarter. This is up slightly from the first half. Though, it will be interesting to see how these numbers change in the coming quarters after the company increased its membership cost from $99 to $129 on 8 April.

Kogan's founder and CEO, Ruslan Kogan, appears to believe that the Kogan FIRST offering is the key to competing with the likes of Amazon, Temu, and Wish in a highly competitive market. He said:

Kogan FIRST has become the north star for the business, creating immense value for our loyal customers. We deliver remarkable value to our loyal members, and in so doing ensure that members come to Kogan first!

The company's CEO also revealed that Kogan is now looking to compete with companies like Webjet Ltd (ASX: WEB) in the travel market. He adds:

I'm excited to announce today that we continue to grow the benefits through the program, launching Kogan Travel hotel deals. As of today, Kogan Travel now offers the best value domestic and international hotel stays and packages with exclusive pricing for Kogan FIRST Subscribers.