Quote:
Originally Posted by Boeing Guy
...I explained that we could get the iron for £10 less on Amazon and showed her on my phone...
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There are many reasons that distance buying is cheaper than in person at a store. Typically, it costs less to manage stock, you don't need customer-facing sales staff, no need to maintain displays, heat shop floors etc.
However, Amazon is cheapest because they have such an
aggressive plan to kill off all competition. They operate with as close to zero profit as they can, a policy which means they pay virtually no tax, and which is actually embraced by shareholders. 2010 was their "worst" year because they made a worldwide profit of more than a billion US dollars, compared to a usual loss in the millions. Sales in the UK alone (not worldwide) were £4,000 million in 2012 - but they only paid tax of £2.4 million, which suggests £10 million profit, which in turn means their average markup is ¼%.
To be fair to your salesperson, I thought she sounded quite restrained. Currys also works on a barely perceptible profit margin, but that's simply because they can't compete with online sales. I'd have said "We don't price match online sites. If £10 is a 'poxy' amount, you'd be spending it and not arguing over it."
Amazon will kill Currys, eventually - first the staffed stores, then their online presence. Once they have zero competition, they can set their own prices, or continue to keep them low to stifle any fledgeling competitor.
Don't get me wrong, I think business
should be "survival of the fittest". But I'm not so naive as to think that this sort of practice will have zero repercussions in future. Who knows, you might end up spending that saved £10 in income tax, increased to support ex-Currys staff who end up claiming unemployment benefit...
(I've only included one link in this post - it directs to The Guardian. If there are a bunch of others, it's Accyweb using my post as an advertising opportunity.)