How The Internet Killed Profit

How The Internet Killed Profit

Author
Discussion

Andrew[MG]

Original Poster:

3,322 posts

197 months

Friday 19th September 2014
quotequote all
I'm sure there will be a few people on here that agree with this and a few that are making money and might disagree? http://techcrunch.com/2014/09/17/how-the-internet-...

Dr Interceptor

7,743 posts

195 months

Friday 19th September 2014
quotequote all
Yes and no!

I've got two ecommerce websites selling Swimming Pool products. Products are listed on there at a discount to compete with other internet resellers in our market, so naturally the margin on web sales is lower than we experience in the retail shop.

Long term though, having the websites has increased our throughput considerably, which has increased our spend with suppliers, in turn allowing us to negotiate better discounts. This means the margins on the web sales have improved, and the already strong margins on retail sales have increased.






avinalarf

6,438 posts

141 months

Friday 19th September 2014
quotequote all
Andrew[MG] said:
I'm sure there will be a few people on here that agree with this and a few that are making money and might disagree? http://techcrunch.com/2014/09/17/how-the-internet-...
Companies that only sell their own brand that are not sold by others e.g. Next, Zara,are more likely to be able to make a decent profit.
It is interesting that one of the most successful clothing retailers recently ( Primark) does not sell on the net.
I think that some people confuse turnover with profit,as has been said "Turnover is vanity,Profit is sanity.

Edited by avinalarf on Friday 19th September 12:24

threesixty

2,068 posts

202 months

Friday 19th September 2014
quotequote all
Andrew[MG] said:
I'm sure there will be a few people on here that agree with this and a few that are making money and might disagree? http://techcrunch.com/2014/09/17/how-the-internet-...
Not the case for us, we're in a niche market though. We constantly push people towards the web because our order processing costs are much lower there, so for us the internet has increased profit.

We also use the internet to express our USPs rather than indulge in a race to the bottom with our competitors.

Dr Interceptor

7,743 posts

195 months

Friday 19th September 2014
quotequote all
threesixty said:
We constantly push people towards the web because our order processing costs are much lower there
I'm still surprised though how many people want to order over the phone and don't trust the internet. Even though online ordering would probably be more secure.

threesixty

2,068 posts

202 months

Friday 19th September 2014
quotequote all
Dr Interceptor said:
I'm still surprised though how many people want to order over the phone and don't trust the internet. Even though online ordering would probably be more secure.
Yes, its daft. We use sagepay for pretty much all transactions, so if you call us we'll just enter your details into exactly the same system you would have used if you bought online.

Only difference is our staff now have the opportunity to record your card details.

jammy_basturd

29,776 posts

211 months

Friday 19th September 2014
quotequote all
threesixty said:
We also use the internet to express our USPs rather than indulge in a race to the bottom with our competitors.
This. The internet has only killed profit for those companies that either didn't have a USP (other than a good location on a town high street), didn't know their USP (or how to market them), or had the USP of being able to offer products of varying quality at the lowest price.