Do you know why online shopping is cheaper than offline?

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Why online shopping is cheaper than offline

This blog contains various reasons due to which price difference between the online and offline shopping occurs and makes online products economical in comparison to stores some of them are as follow:

Less Overhead Cost.

Biggest reason for low prices in offline stores is because they don’t have to maintain a retail store or shelf space in any departmental store, No staff salaries is involve in the processdue to which ultimately the price of the final good is lesser in comparison of offline stores. Though websites have cost too but this cost is nothing in comparison to the cost of offline stores.

More Competitive Market.

In a perfect competitive market buyers have many sellers who are selling same product which gave buyers bargaining power of buyer and they have option to choose between who is giving goods at a lowest prices because of huge amount of information available online. In offline stores buyers do not have opportunity to see the product and price of every seller, it is technically impossible, but in online stores comparison of prices is a game of few minutes. Which makes ultimately the prices of goods lesser in online than offline stores.

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Less Supply Chain Cost

In traditional offline marketing lots of parties act as a bridge between manufacturer and customer such as transporter, wholesaler, and retailer and so on and each add its own commission before handover good to other party which ultimately increase the price of final products.

No Geographical Boundaries
Online stores can have maximum no of customers, they have no geographical boundaries and can access to customer from every region due to which they are able to achieve economy of scale because as no of production increases cost occur on each product decreases simultaneously actual price of their products reducesin ecommerce.

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