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Why We Should Always Expect Less Prices At Online Stores Than At On Shore Malls

Aug 8, 2008
Traditionally an online store is one open in a market place where people use to go and shop on their physical place. From owner's point of view they have to buy or rent the place. Depending on the market place it may cost less or very high but its a major cost on owner's part.

To attract customers they have to apply some beautiful and noticeable eye-catching counters. They have to appoint employees, salespersons to accommodate customers. These salesperson are paid on daily or weekly basis, so again its a major cost to run a store or mall. This is a running cost on owner's part.

The counters itself costs that may come under one time cost , and not as running cost, but its an expense. To manage all these running or one time costs they have to sell products at prices where they may make reasonable profit after accommodating all these costs.

On the other hand, to run an online store you don't need costly rental places. It may require a warehouse in a very cheap place, as such customers are suppose to look at your site not place.

It does not require to have beautiful racks and salesperson on those racks. All you need is to have an online identity, the domain name. It hardly costs 10$ per year. A hosting company to host your Home and product pages, a shopping cart to take your orders and accounting systems. Delivery mechanisms are easy to avail and usually costs put on customers end.

All the above mentioned things, i.e. hosting, shopping carts, accounting system does not cost a lot. It requires to develop online site from a web development company or even from a free lance individual developer. Along with web site an administration panel is developed to manage new products, existing product prices, Hot offers and much more.

These are usually easy to use forms that anybody can use to add / remove / update things. But its just one time effort and cost. Then you host those pages into a hosting company web server, that may cost on avg. around $200/year for a shared hosting. This is a good quality hosting company price. Shopping carts charges are nominal fees per transaction or can be availed on monthly basis.

On the other hand the procurement costs are equal for both online or offline stores, if lets say suppliers are same. But off-shore mall has to keep prices up to bare their costs for things mentioned above while the online store, if selling on the same rate can make much more profit than the off-shore one for the same products.

That's the reason why this is logical for an online store, whether you are buying electronics good, jewelry, clothes, gadgets, cell phones, grocery items or whatever online store can offer less prices than an physical mall and this is what we should also expect from them, along with good customer care and money back guarantees.
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