Shopping Discussion

Why is stuff cheaper online vs in stores?

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  • May 10th, 2008 7:26 am
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Deal Addict
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Apr 14, 2007
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Why is stuff cheaper online vs in stores?

Recently went to chapters, looking for a book, saw the price at around 60bucks.
Looked on chapters.ca and saw the book for 40bucks!

It happens pretty much everywhere? I'm wondering, why so?
What's the point of selling stuff in the store, when the same thing is going to be cheaper online on the same store's website??
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Oct 20, 2005
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There are more expenses of operating a B&M store, which can include (but not limited to) customer service (more employees), infrastructure, and gas/electric/hydro bills.

Operating an online store does not require as many of these expenses, but there are many people who do either are not familiar with shopping online, or just want to inspect the product (with some questions) prior to buying it. For these reasons, they still need to have their B&M stores open.
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Sep 22, 2007
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heat wrote:
May 5th, 2008 7:03 pm
Recently went to chapters, looking for a book, saw the price at around 60bucks.
Looked on chapters.ca and saw the book for 40bucks!

It happens pretty much everywhere? I'm wondering, why so?
What's the point of selling stuff in the store, when the same thing is going to be cheaper online on the same store's website??
They don't have the same overhead online as they do in-store so you get a cheaper price. You get instant product by buying in-store but you pay a higher price to get it. The stores could be franchised while the online site is corporate.
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Oct 9, 2007
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mmmken wrote:
May 5th, 2008 7:08 pm
There are more expenses of operating a B&M store, which can include (but not limited to) customer service (more employees), infrastructure, and gas/electric/hydro bills.

Operating an online store does not require as many of these expenses, but there are many people who do either are not familiar with shopping online, or just want to inspect the product (with some questions) prior to buying it. For these reasons, they still need to have their B&M stores open.
well said. :!:
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Aug 19, 2005
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Some of these stores, especially in snobby malls like Yorkdale, must sell $1,000 a DAY just to pay their rent, which is about $25,000-$30,000 a month.
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Mar 11, 2008
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Kommander_KornFlakes wrote:
May 5th, 2008 7:16 pm
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Some of these stores, especially in snobby malls like Yorkdale, must sell $1,000 a DAY just to pay their rent, which is about $25,000-$30,000 a month.
If their rent is $1000 per day then they would have to sell well over double just to pay their rent as they have to factor in the cost of their product too.
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Oct 12, 2005
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I believe mmmken's summary is a good for general goods. Every industry has its limitation, like selling ice cream online, or it has opportunities like renting DVDs (once a deal was cut with postal services).

However, some companies want more visibility or market share. They're willing to discount prices just to open another sales channel to block out competitors. Futureshop/Bestbuy offered free shipping, and Staples had their 150% Price Match, CanadaComputers has a "Cash Price" and changed that to $6 flat shipping. I wouldn't say Online is always cheaper because some retailers inflate their shipping. It's very important to do homework and figure out how pricing really works. I like Dell's model the best, no-hassle pay posted price+tax and it arrives at your door.

For things like clothes or shoes, I don't care if online's cheaper because they have to fit and feel comfortable.

-- Oh and state & provincial tax plays a large part in your savings.
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Apr 14, 2007
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I see, thanks for the info guys.
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7jaii wrote:
May 5th, 2008 8:07 pm
CanadaComputers has a "Cash Price" and changed that to $6 flat shipping.
They probably had to change it. you are not allowed to charge different amounts for cash purchases than CC purchases, it is against he CC companie's merchant agreement.

If a company does that you can file a complaint with the CC company (Mastercard/Visa) and they will rectify it.
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Apr 27, 2008
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Most online retailers don't actually have warehouses or much inventory on hand. When you order from them, they send the order to a fulfillment center and it ships directly from there. Not having much inventory saves tons of money in upfront cost$, and they don't have all of their cash tied up in inventory sitting there.

This also means that there is no inventory to get broken, stolen, lost, or become outdated. Big difference compared to most online retailers!
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Sep 22, 2007
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brunes wrote:
May 6th, 2008 8:32 am
They probably had to change it. you are not allowed to charge different amounts for cash purchases than CC purchases, it is against he CC companie's merchant agreement.

If a company does that you can file a complaint with the CC company (Mastercard/Visa) and they will rectify it.
You can't charge more if a person uses a credit card but you can offer a discount if they pay by cash. It's a fine line between the two but it is legal.
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Nov 25, 2007
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It's all about economy of scale. When you specialize into taking orders for books and deliver them in large quantity, you could become very efficient at it (efficient here means producing more output with less input). So in the case of online bookstores, what they probably need as input are warehouse, website, regular carrier pickup with discounted shipping rates, basic utilities and salaries for a few administrative employees. Many tasks like website hosting can be outsourced.

Unlike a full fledge bookstore (like your local Chapters), you need to handle more than just taking orders and deliver. e.g. you need to answer customer's queries, help customers find items, promotion and publicity, shelving. You probably end up paying more in utilities, rent and salaries, and thus incurring a higher operation cost than an online bookstore.
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Feb 6, 2003
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I think that the posters who talk about the different sales channels are on the right track.

The books cost more in the store because buyers in stores are willing to pay more. It is a different market from online purchasers.

Overhead/cost has nothing to do with it.
Deal Fanatic
Aug 22, 2006
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Like others have said, overhead. A lot of online stores might not even have the item in stock. They will take your order then order the item from the supplier. Result = they has less cash tied up and thus can make more money with less money so they can get away with a lower margin.

If you want an extreme case, there's a certain store in GVR where the online price + instore price = different but advertise you can buy in store. Goto the store and you're required to have a printout of the ad or you won't get the lower price :evil:
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Aug 5, 2004
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Another big factors is returns. Online stores have to deal with a much smaller percentage of returned products. People can much more easily return stuff to stores. There is a much higher dissatisfaction criterion to get people to put out the expense and uncertainty of shipping something back to an online source.

Taking all the discussed factors into account, I'm always surprised than online stores are much cheaper than they are.
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