Question

why do online stores tend to offer lower prices compared to traditional stores? In other words, what business model have the online stores/suppliers follow to enable them to lower the cost and also prices?

Answer 1

The retailers or suppliers have invented a new model of business technique that is the online stores or suppliers. Through this method they can make up the needs of the customers with the less operational expense. The important benefit of the online stores is that they pass the savings on the customer by reducing the cost of the products. Nowadays, The role of traditional stores are declined because,the peoples are attracted more towards the offers provided by the online stores. The drawbacks of traditional stores are,

• Rent of building
• Electricity
• Payroll
• Fixtures
• Shrinkage loss etc.

The online stores also having some disadvantages such as website cost,infrastructure cost etc .Online shopping is the easiest way for finding the products which we need in a short duration of time. The communication with the online shoppers make the shopping more comfortable as it is streamlined with the automatic responses to the questions which we asked. Nowadays more professionals and trained employees comes to this sector because of its benefits and passion in the business field.

Todays technology makes the online dealings more easier. The online stores provide many offers and all in every seasons to attract the people and the reduction of price of the products is also a tricky business among them.The competition between different online stores also increased to grab the customers with the exciting offers and discounts and some of the benefits of the online stores to the suppliers are,

1. It paves an easy access to the market
2. Decreases the overheads
3. Leads to have more potential for rapid growth
4. Expands the market or export
5. Communication between the customer and the retailer increase the customer intelligence.