Do online prices need to match instore prices?

rustyboy21

InsideInsurance wrote: »

What people think and what the truth is isnt always the same. When I worked for Tesco the official line and what was told to the store staff was that Northern Ireland stores were more expensive because of the shipping costs from the mainland to N.Ireland. The reality was that they were more expensive as there was less competition in the territory so higher costs could be supported. Most goods were sourced in ireland or had no material difference in shipping costs from eg Poland to there than from poland to england so the claim it was just cost related was totally bogus but it made logical sense and people/ staff bought it.

But that example is totally flawed. Most products coming from Poland are transported by road. Therefore the product will leave Poland by Lorry, travel across Europe and then by Ferry to, say, Hull. It will then go across the M62 to Liverpool/Holyhead and the onto Ireland.


There will be an increase in cost for the ferry crossing, fuel used, man hours etc, which will end up being added to the retail price.


I have a colleague who owns a business in the IOM. He gets certain product delivered to my store in E Lancs. We arrange to meet up in Liverpool and load the goods onto his van and then on the steam packet ferry to Douglas. This works out the cheapest option for him, as the boxes are not designed to be shipped by carrier.

InsideInsurance

Money-Saving-King wrote: »

I have no idea who II Electrical is which one of the reasons why they'd need to pay to get customers, many other business's will just have people type in the URL. The main fact is it is much cheaper to run and online business than a physical one, if you don't think this then why haven't Amazon gone onto the high street?

How do you know the name of an online only company to type in the URL? You arent just guessing are you? Dabs, Amazon etc have spent billions on marketing over the years so that you know their URL to type in.

If your are thinking Currys, PC World etc then their investment in physical stores have been part of their online marketing campaign.

If online is so much cheaper to run why is Amazon's profit so small given their global reach in comparison to physical stores which have a much smaller footprint?

Margins on online sales is typically much thinner than it is with physical stores it is only the promise of what online may be that attracts investors cash that keeps many operations afloat

Money-Saving-King

InsideInsurance wrote: »

If online is so much cheaper to run why is Amazon's profit so small given their global reach in comparison to physical stores which have a much smaller footprint?

Because as we've seen a cable can cost £9 in a shop and only £3 online from the same retailer, so at least £6 of that £9 is profit. If the profit was say £1 from being sold at £3 then you'd get £7 from a £9 sale, that's a 700% increase in profit!

But overall the cost of running an online retail business is much cheaper.