RE: UKNM: Price matching

[David Bentley]

>Robin Edwards wrote:

>With so many new "mail order" companies springing up on-line, with

>presumably low overheads and possibly thus lower prices, things could become

>very complicated for the trad retailers.


I wonder whether lower overheads is truely the case - perhaps I can refer

back to the discussion of 'Amazon's lack of profitability' thread that we

discussed not so long ago.


We know that some processes are cheaper through the use of the net - for

example the cost of selling a BA ticket online rather than through

estabilished means.  But are these legendary figures that are banded around

this industry truely indicative of substantial cost savings or is it just

hype?


We know how expensive it is to develop and maintain a distribution system -

it ain't cheap.  We know how much it costs to maintain a sophisticated web

site (esp. commerce site) - it ain't cheap.  We know how expensive it is to

maintain a significant customer service environment with customers who

require immediate attention - it ain't cheap either.


Sure, the web takes away the physical space and the high overheads that

that brings, but these are replaced with other overheads.


There are cost saving to be made and there are good deals to be had through

the net, but is it all promotional?  Are sites cutting prices as part of

their investment in customer, business and brand building?  Or is it really

cheaper to build a business and retail over the net?


David