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The Anatomy Of Cost Reduction

Feb 29, 2008
It would be hard to imagine a world where an online shop didn't exist. While many industries have benefited from online shops, the Auto and mobiles industry are among the best examples of what technology can do.

In a nutshell, online shops have enabled cheap cars and Nokia mobiles to become cheaper and consumers aren't complaining.

How Manufacturers Cut Costs in Online Shops:
Manufacturers of cheap Nokia mobiles or cars have seen a lot of success with online shops but where exactly are they cutting their costs? Oddly enough, most of the cost-cutting is done via the mail and printing departments of a company.

If information on cars or a Nokia can be found on the internet, customers will be much more likely to search the Internet first and save the company printing costs. It doesn't sound like the advent of these online shops would decrease the overall cost by much, but Cisco and Xerox have reported that it has saved them millions in cut costs.

More importantly, Auto and phone companies can cut labor costs. Since a lot of business has shifted to the online shop, no longer does the company need as many physical stores or employees. While online shops could never fully replace physical locations, they do indeed help reduce production cost by a large factor.

The Benefit of Online Shops to Consumers:
Consumers benefit when the manufacturer benefits. Since the manufacturer has less production cost, it can pass the savings onto the consumers. This enables more customers to buy cheap Nokia phones or cars opening up business to more potential clients for the manufacturer.

But consumers also appreciate the ease of online shops. One can order a cheap Auto or Nokia is minutes compared to the longer wait endured by driving to a physical location, waiting in line, and then finally speaking to the support representative. Compare this to the instant transaction over the Internet, and you can see why online shops have become so popular.

Lastly, customers can appreciate the lack of interaction with a Nokia or Auto employee. Humans make mistakes, and therefore, create problems. An online shop is much less resistant to problems: boosting both customer satisfaction and company stability.

Compare and Contrast The Best Benefit of Online Shops:
To cap it all off, we have the best benefit of online shops: the ability to search for the best deal. If you were to search for a cheap Nokia or for cheap cars in the physical world, you'll likely meet a salesman. These salesmen only want to make a sale for their company- not help the consumer find the best cheap Auto or cheap Nokia.

This can be contrasted to the world of online shops which can be compared to other online shops so that customers get the best deal. This ensures that consumers who do a little research will ultimately find the best Auto or Nokia deal possible by bypassing the middleman and going straight to the source.

In the end, we can all thank online shops for the cheap mobiles and cars that we are able to afford. Without the aid of online shops, we would have to resort to dealing with pesky salesmen. It's times like these that it's good to have technology on our side.
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