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Online Shopping: why are products so much cheaper online?

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“Shopping is cheaper than a psychiatrist!”

Online shopping is a trend to stay. From visiting malls to now visiting websites – you can’t ignore the dramatic shift.

One important reason for this is the massive difference in price.

How is it that the shoes you loved in the store were Rs. 4,500, but, magically, online they were for Rs. 1,000? How is it that makes the prices fall so much in the virtual world?

Some reasons are absolutely justifiable:

There are no rent costs, store costs which reduce the expenses of the seller, and the benefit is passed onto the buyer. Also, often, the products are sourced directly from the manufacturer. This eliminates the middlemen and their profits, thereby reducing the costs. Another reason is that online platforms have a much larger geographical reach than a physical store. Because of this they can generate higher sales. Their business model is based on the psychology that 6% profit on a larger volume is better than a 20% profit on a smaller volume.

However, there is one more strong reason for this price difference – the quality.

Yes, it is true. You may revel in the convenience of online shopping, but the low prices on the internet are often accompanied by even lower product quality. What companies do is that they have 2 manufacturing processes. One for their retail stores, which is sold at higher prices and of a much superior quality. And one for the online market, where the quality is compromised, and hence, it is much cheaper. So the same shoes that you see in the store will be of a much superior quality and for Rs. 4,500, than the ones you buy online for Rs. 1,000.

Manufacturers have little or no incentive to produce high-quality goods when selling them online. In contrast, the traditional retail channel still has a lot of value. This is because there’s a lot of incentive for manufacturers to produce high quality products when they know they will be displayed on a shop floor and tested by consumers, and compared physically even to other brands, before they’re purchased.

Getting a ‘good deal’ may be great, but ensure that the ‘good discount’ is not compensated by ‘bad quality’.

Disclaimer: The above article is curated based on limited and publicly available open source information. The views and opinions expressed therein and all data and information so provided is solely for informational purposes, to be used at the sole discretion of the reader. If you disagree with any article or any part thereof, please contact us and we will resolve the issue at the earliest. KyaBae makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use.

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