Why online shopping is cheaper?

This is the time of digital marketing, where everything is available at your doorstep by just few clicks. Literally with the advent of numerous online shopping options on the internet the bricks and mortar shops are having a tough time. Shopping online can save you money especially when you couple it with online savings codes, deals of the day, and free shipping offers.

Retailers do not always offer the same deals in the brick and mortar stores as they do at their online stores. The reason for this is the costs of running an establishment is considerably greater than an online store. Factors such as rent, electricity, payroll, fixtures, and shrinkage loss, all contribute to the gross margin and overhead of doing business in a shopping center.

Retailers have discovered that they can meet the needs of their customers with less operational expenses, by having an online location and not a physical store. Good online retailers then pass that savings onto their customers by cutting the cost of the products.

Most online shops only run from a warehouse, or even a house. This means lower rental costs than a shop front. Also, an online store requires much less employees to pay, since there isn’t any physical selling going on. Websites are so much cheaper to run and maintain than a brick and mortar store. 

Unfortunately, with the increase in people using and selling online, traditional retailers are finding it challenging to compete with online stores. It’s very hard to make a profit from a physical store, and takes a lot of work, whereas with an online store, your profit margin is much higher (Due to lower running costs), therefore you can afford to lower prices to be much more competitive than a physical store.

Online shopping is a great resource for finding products that are being liquidated. Housing this product in a central warehouse allows the retailer to sell products longer by letting them sit, unsold, without destroying their profit margin. This practice promotes big savings for customers who do not need to purchase the most current products.

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Last modified: May 20, 2014