Rocket III

No, you nob, that *I* claim/think "this sort of unjustifiable price
fixing is perfectly acceptable".

Unfortunately facts don't bear this out.

...and purchasing decisions, as I said previously, are not solely based
simply on price. Your understanding of this appears to be quite limited
so I'd be most grateful if you didn't call me a fuckwit.

 

It was somewhere around Barstow, on the edge of the desert, when the
drugs began to take hold. I remember Steve Uzochukwu

I was recently watching telly on a Samsung 42" plasma thingy. Impressed?
Not a bit; dreadful pixellation and posterisation seemed to come and go
at random.

 

Somewhere with enough business acumen and decent salesmanship to
survive, by ensuring that you bought it there in the first place.

 

Website infrastructure and telephone ordering aren't cheap either.

I'd be interested to see a direct comparision of costs between and
online/mail-order business and a true shop selling the same stuff.

I have a feeling that the costs won't be too far apart.

 

It would be interesting but I think the costs will be appreciably
different; enough to materially affect the end price.

It's just a feeling so some decent figures would be useful.

 

Ben says...

Most SMEs probably won't run their own websites, just have them hosted by
a specialist hosting company. So apart from getting somebody to update
the catalog once in a while everything else would be pretty much a fixed
cost with minimal management required.

I was told at a recent interview it was somewhere in the region of 25%
cheaper. That was for a large furniture manufacture.

 

But you'd pay a pretty hefty cost for the bandwidth on a monthly
basis. And updating the catelog might not be a simple task.

Hmm, I'd have just thought things like delivery (where some companies
don't charge for it), packaging, larger warehousing, more staff
(packers, phone sales, it support etc), need to hold greater stock
levels, etc would balance it out.

 

Oh, and I just though. Yes, it's a fixed cost, but how does that cost
compare with it's equivalent... rent and maintainence of a building.

Especially given that the web shop will have a building as well.

 

Ben says...

They already had that as most of their stuff was home delivery or made to
order anyway. So their savings would be bigger than most I imagine.

The other advantage with a virtual shop is that your warehouse can be
located in a cheap to rent location rather than a costly shopping area.
And of course even the smallest of companies can have as fancy a website
as the largest.

 

mups scribbled:

It'll cost them. If they have it developed out of house I'd say £50k
for a smallish POS web site, plus hosting, plus updating it.

My nephew works for a computer part company that at the moment supplies
places like Dabs, Watford, etc, so they have the warehouse system
already but its geared up for receiving orders for 5000 'x' items, and
sending them out in lumps of 250, for example.

The directors just decided to get into dealing directly with the public
and Ross is going to be team leader for developing and maintaining the
web side of things. Taking on 3 extra staff to cope with the
developoment, and will get rid of 1 of them, 2 others to maintain it.
So an extra £75k a year to develop it, dropping down to £50k to
maintain it. (not including Ross' salary as he was already there)

They have a decent (at the moment) bandwidth connection so host
everything on site at the moment, but I can't see that lasting if it
takes off?

 

Throw away the packaging and hide the manuals? I suspect it's not that
commonplace to be carrying a nice, shiny Yamaha A1 (or today's
equivalent "must have") in your luggage. They may be just a tad
suspicious.

 

Verdigris says...

Their Glasgow shop is quite good. I've shopped there.

 

As is their Worcester one, but it's so well hidden that I didn't find
it till after I'd forked out 50 quid for a pair of Levi's at
Debenhams. They were doing the same ones for 35.

 

No it can't as a lot of EU fines show recently.

Even Microsoft can't simply "do what they like"

 

Verdigris says...

Those were the two reasons I shop there. Every other shop sells
expensive tat for freak-bodied people.

 

Champ says...

Whoosh

 

Soon as the European software patents become law (anytime now,
given the political end-run the council has pulled), the typical
webshop will be so swamped with extra costs in the form of license
fees payable to software "patent" holders that they'll never be
able to make a profit anyway unless they jack up the prices.
(http://www.nosoftwarepatents.com/en/m/basics/webshop.html)

So the local shop has nothing to worry about - just send the
webshops address to the patent holders lawyers.

 

We were talking about pricing and overcharging, or abuse of one's
position in the marketplace.

Looking at cars or CDs there have been investigations into the
practices of the companies that make and sell them.

A private company cannot do what it likes, IN YOUR CONTEXT.

I thank you.

 

So why don't you do Britain a community service and set up your own shop
importing from the US all these items that can be bought so much more
cheaply overseas.

I'll laugh after you go out of business insolvent.

JL
(here's another economics hint, competition drives the prices down, so
if there was margin to be made doing it, someone with more of a clue
than you would already be doing it, but hey, if you reckon I'm wrong,
put your money where you mouth is)

 

John Littler scribbled on the back of a napkin:

You mean the economics of, for example, Tesco's getting sued by Levis
for sourcing cheaper Levis outside the EU in order to keep the
artifically inflated prices on the EU market high?