Off the shelf, or on the net?

R. Dinakaran | Updated on March 28, 2013 Published on March 28, 2013

As options and lucrative offers on gadgets increase online, retailers have a hard time selling products in stores.

Brick and mortar retailers are the ones who have been affected the most by online shopping sites. A dealer said many of those who came to his shop always had a lower quote from shopping websites. “This is becoming impossible,” he said. “They come to me only after checking the prices in several online stores. We can never match the price they offer,” he said. He had lost several regular customers to online shopping sites.

His concern was genuine. Many online shopping sites offer products at rates that are impossible to match by brick and mortar stores. If this is not enough, they have ‘offers’ that give you additional discounts -- over and above the cheap rates.

The dealer I was talking to was trying to dissuade me from buying online. “They are able to offer low prices because they sell refurbished products,” he said. “You may also never know what you will be getting. What if you get a brick or a fake product,” he asked me.

Yes, he had a point. There was a report recently where people who had bought iPads in the US were surprised to find blocks of wood instead of iPads. And this was not even an online store. The article urged readers to open the pack before they billed it, or immediately after billing - in the store itself.

Unfortunately, there is no way to check the product before billing if it is bought online. There was the incident where the seal of the product pack was found to have been tampered. The battery of the phone was in the phone. The customer care of the online store fortunately agreed to take back the product and offer a replacement.

There have been instances of online stores not shipping the article and not informing the buyer about the non-availability of stocks. The amount is quietly ‘credited’ to the shopping site’s account of the customer, but not refunded. “You can by some other product with the money in the account,” comes the helpful suggestion.

One interesting offshoot of the online vs physical stores is the competition within the same company itself. The prices in the online store of a company is often lower than the price quoted by the physical counterpart. This sometimes results in situations where the store guys try to prevent you from buying from their own online store. “You will have to add the VAT and other charges from the displayed price,” you are told. Yes, there are some stores where the initial price displayed is the “pre-tax” price, but most of the online stores now display the final price. In fact, the price you pay before checking out may be even lower if you have a discount or promo code. Last month, an online store had an offer where a phone costing around Rs 16,000 was being sold at Rs 9,950.

Some online-only retailers have gone one step further because of the stiff competition. Within minutes of you placing your order, you get a call from “your personal executive”. He gives his name, phone number and email ID and says you can contact him anytime if you had issues with the order or the product. He also follows up with an email confirming the details.

What makes online shopping interesting is that we are able to compare the prices across stores. Even smaller retailers have joined the online bandwagon by selling their products in sites like eBay. One guy even shut down his brick-and-mortar shop and switched fully to eBay as he found it to be more profitable. He started functioning from his home and saved on the shop rent, air-conditioning and other overheads. He said he saved at least Rs 30,000 per month because of the switch to online. He also said he found more time to be with his family. The only extra expenditure for him was to hire a person to pack the goods for despatch.

There are some enterprising guys who have gone a step ahead. They are on the constant look-out for good online offers. Once they see a good one, they buy a few pieces and resell it with a little extra margin - without bill and warranty. Some even offer bill and warranty under fake names. “There are some companies that don’t require you to produce bills as proof of warranty while servicing. The authorised service centres can find out if the gadget is under warranty by keying in the IMEI number. So, that makes things easier for us,” they say.

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Published on March 28, 2013
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